1. G.R. No.
L-21438             September 28, 1966 facts favorable to petitioner, and then, to overturn the appellate
AIR FRANCE, petitioner, 
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF
APPEALS, respondents.
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
1
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". 16They 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.
2
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)
xxx     xxx     xxx
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. 24Implicit 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
3
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". 29And 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
4
xxx     xxx     xxx
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
xxx     xxx     xxx
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 co-passenger. 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
5
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
6
(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. 1awphîl.nèt
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
7
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.
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.

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

8

2. G.R. No. L-14257             July 31, 1959
THE PEOPLE OF THE PHILIPPINES, petitioner,  triplicate so that the duplicates and the triplicates were filed out by
vs.
HON. BIENVENIDO A. TAN as Judge of the Court of First
Instance of Manila. Br. XIII, PACITA MADRIGAL-GONZALES,
ANGELITA CENTENO, JULIA CARPIO, CALIXTO HERMOSA,
and CRISPULA R. PAGARAN alias PULA, respondents.
Assistant Fiscal Apolinar Tolentino, Prosecutors Norberto J.
Quisumbing and Antonio Villegas for petitioner.
Gonzalo W. Gonzales and Bausa, Ampil and Suarez for
respondent Pacita M. Gonzales.
Estanislao A. Fernandez for the other respondents.
LABRADOR, J.:
In Criminal Case No. 36885 of the Court of First Instance of
Manila, respondents Pacita Madrigal-Gonzales and others
charged with the crime of falsification of the public documents, in
their capacities as public officials and employees, by having
made it appear that certain relief supplies and/or merchandise
were purchased by Pacita Madrigal-Gonzales for distribution to
calamity indigents or sufferers, in such quantities and at such
prices and from such business establishments or persons as are
made to appear in the said public documents, when in fact and in
truth, no such distributions of such relief and supplies as valued
and supposedly purchased by said Pacita Madrigal Gonzales in
the public and official documents had ever been made.
In order to prove the charge of falsification, the prosecution
presented to a witness a booklet of receipts, which was marked
Exh. "D", containing value invoices numbered 101301 to 101400
of the Metro Drug Corporation, Magallanes corner Jakosalem,
9
Cebu City. The booklet contained the triplicate copies, and
according to said witness the original invoices were sent to
Manila office of the company, the duplicates to the customers, so
that the triplicate copies remained in the booklet. Witness further
explained that in preparing receipts for sales, two carbons were
used between the three sheets, the original, the duplicate and
the use of the carbons in the course of the preparation and
signing of the originals. The witness giving the testimony was the
salesman who issued a triplicates marked as Exh. "D-1".
As the witness was explaining the figures or words appearing on
the triplicates, Hon. Bienvenido M. Tan, then presiding in the
court below, interrupted the proceeding holding that the triplicates
are not admissible unless it is first proven that the originals were
lost and can not be produced. Said the court:
Triplicates are evidence when it is proven first that the
original is lost cannot be produced. But as the witness has
alleged that the original is in the Manila Office, why not
produce the original?
Another witness, accountant of the Metro Drug Corporation in
Manila, was also called by the prosecution to testify. He declared
that sales in the provinces were reported to the Manila office of
the Metro Drug Corporation, and that the originals of the sales
invoices are transmitted to the main office in support of cash
journal sheets, but that the original practice of keeping the original
white copies no longer prevails as the originals are given to the
customers, while only the duplicate or pink copies are submitted
to the central office in Manila. Testifying on certain cash journal
sheets, Exhs. "A", "A-1" to "A-10" he further declared that he
received these from the Metro Drug Corporation, Cebu branch,
and that the said cash journal sheets contained the sales made in
the Cebu branch.
After the cross-examination of this last witness, the prosecution
again went back to the identification of the triplicate invoice, Exh.
"D-1", already above referred to. It was at this stage that the
judge below told the prosecution that the law applicable is Section
46, Rule 123 of the Rules of Court, which requires the production
of the originals. In response to the above ruling, the special
prosecutor claimed that the evidence of the prosecution would not
be able to secure the production of the originals on account of
their loss.
In view of the above circumstances, the prosecution announced
its intention to file a petition for certiorari against the ruling of the
court below to which the court below to which the court below
agreed. Hence this petition.
It is alleged that the invoice sought to be introduced, which were
produced by the use of carbon sheets, and which thereby
produced a facsimile of the originals, including the figures and the
signatures on the originals, are regarded as duplicate originals
and may introduced as such, even without accounting for the
non-production of the originals.
The decision of the question is far from difficult. The admissibly of
duplicates or triplicates has long been a settled question and we
need not elaborate on the reasons for the rule. This matter has
received consideration from the foremost commentator on the
Rules of Court thus:
"When carbon sheets are inserted between two or more
sheets of writing paper so that the writing of a contract
upon the outside sheet, including the signature of the
party to be charged thereby, produces 2facsimile upon
the sheets beneath, such signature being thus
reproduced by the same stroke of the pen which made
the surface or exposed impression, all of the sheets so
written on are regarded as duplicate originals and either
of them may be introduced in evidence as such without
accounting for the nonproduction of the others." (Moran,
1952 ed., p. 444.)
10
It has also been in favor of the petitioner by US in the case
of People vs. Quinones, 44 Off. Gaz., No. 5, 1520, 1525, thus:
It is argued in the second assignment of error that the
confession Exhibit B is not admissible because it is
merely a carbon copy. The said confession Exhibit B,
being a carbon copy of the original and bearing as it does
the signature of the appellant, is admissible in evidence
and possess all the probative value of the original, and
the same does not require an accounting for the non-
production of the original. (Sec 47, Rule 123, Rules of
Court).
Two principal authors on the law on evidence have sustained the
theory of the admissibility of duplicate originals, as follows:
SEC. 386. . . . the best evidence rule is that rule which
requires the highest grade of evidence obtainable to
prove a disputed fact. p. 616. A "duplicate sales slip"
(People vs. Stone, 349 III. 52, 181 N. E. 648) has been
held to be primary evidence, p. 616.
SEC. 420. Duplicate originals. — Where letters are
produced by mechanical means and, concurrently with
the original, duplicate are produced, as by placing carbon
paper and writing on the exposed surface at the same
time, all are duplicate originals, and any one of them may
introduced in evidence without accounting for the
nonproduction of the other. Citing International Harvester
Co. vs. Elfstrom, 101 Minn. 263, 112 N. W. 252. See also
12 L.R.A.(N.S.) 343, People of Hauke, 335 II, 217, 167 N.
E. 1; State vs. Keife, 165 La. 47, 115 So. 363; Taylor vs.
Com. 117 Va. 909, 85 S.E. 499. (Wharton's Criminal
Evidence, Vol. I, p. 661).
SEC. 100. Carbon copies, however, when made at the
same time and on the same machine as the original, are
 duplicate originals, and these have been held to be as
much primary evidence as the originals. Citings U.S. vs.
Manton, 107 Fed. (2d) 834, denied 309 U. S. 664, 84 L.
ed. 1012; O'Shea vs. U.S. 93 F. (2d) 169; Leonard vs.
State, 36 Ala. App. 397, 58 So. (2d) 138; State vs. Lee,
173 La. 770, 138 So. 662; Newman vs. State 65 Ga. App.
288, 16 S. E. (2d) 87. (Underhill's Criminal Evidence, 5th
ed., Vol. I, p. 168.)

We find that the ruling of the court below to the effect that the
triplicates formed by the used of carbon papers are not
admissible in evidence, without accounting first for the loss of the
originals is incorrect and must be reversed. The court below is
hereby ordered to proceed in the trial of the case in accordance
with this ruling. No cost. So ordered.

11
 3. [G.R. No. 80505 :  December 4, 1990.]
192 SCRA 28
THE PEOPLE OF THE PHILIPPINES, Plaintiff-
Appellee, vs.  MARIO TANDOY y LIM, Defendant-
Appellant.
 
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
12
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
13
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

4. G.R. No. 160855             April 16, 2008
CONCEPCION CHUA GAW, petitioner,  for a consideration of P255,000.00 in favor of respondent.9
vs.
SUY BEN CHUA and FELISA CHUA, respondents.
Spouses Chua Chin and Chan Chi were the founders of three
business enterprises3 namely: Hagonoy Lumber, Capitol Sawmill
Corporation, and Columbia Wood Industries. The couple had
seven children, namely, Santos Chua; Concepcion Chua; Suy
Ben Chua; Chua Suy Phen; Chua Sioc Huan; Chua Suy Lu; and
Julita Chua. On June 19, 1986, Chua Chin died, leaving his wife
Chan Chi and his seven children as his only surviving heirs. At
the time of Chua Chin’s death, the net worth of Hagonoy Lumber
was P415,487.20.4
On December 8, 1986, his surviving heirs executed a Deed of
Extra-Judicial Partition and Renunciation of Hereditary Rights in
Favor of a Co-Heir5 (Deed of Partition, for brevity), wherein the
heirs settled their interest in Hagonoy Lumber as follows: one-half
(1/2) thereof will pertain to the surviving spouse, Chan Chi, as her
share in the conjugal partnership; and the other half, equivalent
to P207,743.60, will be divided among Chan Chi and the seven
children in equal pro indiviso shares equivalent to P25,967.00
each.6 In said document, Chan Chi and the six children likewise
agreed to voluntarily renounce and waive their shares over
Hagonoy Lumber in favor of their co-heir, Chua Sioc Huan.  respondent persuaded petitioner to temporarily forego her
In May 1988, petitioner Concepcion Chua Gaw and her husband,
Antonio Gaw, asked respondent, Suy Ben Chua, to lend
them P200,000.00 which they will use for the construction of their
house in Marilao, Bulacan. The parties agreed that the loan will
be payable within six (6) months without interest.7 On June 7,
1988, respondent issued in their favor China Banking Corporation
14
Check No. 2408108 for P200,000.00 which he delivered to the
couple’s house in Marilao, Bulacan. Antonio later encashed the
check. 
On August 1, 1990, their sister, Chua Sioc Huan, executed a
Deed of Sale over all her rights and interests in Hagonoy Lumber
Meantime, the spouses Gaw failed to pay the amount they
borrowed from respondent within the designated period.
Respondent sent the couple a demand letter,10 dated March 25,
1991, requesting them to settle their obligation with the warning
that he will be constrained to take the appropriate legal action if
they fail to do so.
Failing to heed his demand, respondent filed a Complaint for Sum
of Money against the spouses Gaw with the RTC. The complaint
alleged that on June 7, 1988, he extended a loan to the spouses
Gaw for P200,000.00, payable within six months without interest,
but despite several demands, the couple failed to pay their
obligation.11
In their Answer (with Compulsory Counterclaim), the spouses
Gaw contended that the P200,000.00 was not a loan but
petitioner’s share in the profits of Hagonoy Lumber, one of her
family’s businesses. According to the spouses, when they
transferred residence to Marilao, Bulacan, petitioner asked
respondent for an accounting, and payment of her share in the
profits, of Capital Sawmills Corporation, Columbia Wood
Industries Corporation, and Hagonoy Lumber. They claimed that
demand as it would offend their mother who still wanted to remain
in control of the family businesses. To insure that she will defer
her demand, respondent allegedly gave her P200,000.00 as her
share in the profits of Hagonoy Lumber.12
In his Reply, respondent averred that the spouses Gaw did not
demand from him an accounting of Capitol Sawmills Corporation,
Columbia Wood Industries, and Hagonoy Lumber. He asserted
that the spouses Gaw, in fact, have no right whatsoever in these
businesses that would entitle them to an accounting thereof.
Respondent insisted that the P200,000.00 was given to and
accepted by them as a loan and not as their share in Hagonoy
Lumber.13
With leave of court, the spouses Gaw filed an Answer (with
Amended Compulsory Counterclaim) wherein they insisted that
petitioner, as one of the compulsory heirs, is entitled to one-sixth
(1/6) of Hagonoy Lumber, which the respondent has arrogated to
himself. They claimed that, despite repeated demands,
respondent has failed and refused to account for the operations
of Hagonoy Lumber and to deliver her share therein. They then
prayed that respondent make an accounting of the operations of
Hagonoy Lumber and to deliver to petitioner her one-sixth (1/6)
share thereof, which was estimated to be worth not less
than P500,000.00.14
In his Answer to Amended Counterclaim, respondent explained
that his sister, Chua Sioc Huan, became the sole owner of
Hagonoy Lumber when the heirs executed the Deed of Partition
on December 8, 1986. In turn, he became the sole owner of
Hagonoy Lumber when he bought it from Chua Sioc Huan, as
evidenced by the Deed of Sale dated August 1, 1990.15
Defendants, in their reply,16 countered that the documents on
which plaintiff anchors his claim of ownership over Hagonoy
Lumber were not true and valid agreements and do not express
the real intention of the parties. They claimed that these
documents are mere paper arrangements which were prepared
only upon the advice of a counsel until all the heirs could reach
and sign a final and binding agreement, which, up to such time,
has not been executed by the heirs.17
15
During trial, the spouses Gaw called the respondent to testify as
adverse witness under Section 10, Rule 132. On direct
examination, respondent testified that Hagonoy Lumber was the
conjugal property of his parents Chua Chin and Chan Chi, who
were both Chinese citizens. He narrated that, initially, his father
leased the lots where Hagonoy Lumber is presently located from
his godfather, Lu Pieng, and that his father constructed the two-
storey concrete building standing thereon. According to
respondent, when he was in high school, it was his father who
managed the business but he and his other siblings were helping
him. Later, his sister, Chua Sioc Huan, managed Hogonoy
Lumber together with their other brothers and sisters. He stated
that he also managed Hagonoy Lumber when he was in high
school, but he stopped when he got married and found another
job. He said that he now owns the lots where Hagonoy Lumber is
operating.18
On cross-examination, respondent explained that he ceased to
be a stockholder of Capitol Sawmill when he sold his shares of
stock to the other stockholders on January 1, 1991. He further
testified that Chua Sioc Huan acquired Hagonoy Lumber by virtue
of a Deed of Partition, executed by the heirs of Chua Chin. He, in
turn, became the owner of Hagonoy Lumber when he bought the
same from Chua Sioc Huan through a Deed of Sale dated August
1, 1990. 19
On re-direct examination, respondent stated that he sold his
shares of stock in Capitol Sawmill for P254,000.00, which
payment he received in cash. He also paid the purchase price
of P255,000.00 for Hagonoy Lumber in cash, which payment was
not covered by a separate receipt as he merely delivered the
same to Chua Sioc Huan at her house in Paso de Blas,
Valenzuela. Although he maintains several accounts at Planters
Bank, Paluwagan ng Bayan, and China Bank, the amount he paid
to Chua Sioc Huan was not taken from any of them. He kept the
amount in the house because he was engaged in rediscounting
checks of people from the public market. 20
On December 10, 1998, Antonio Gaw died due to cardio vascular
and respiratory failure.21
On February 11, 2000, the RTC rendered a Decision in favor of
the respondent, thus:
WHEREFORE, in the light of all the foregoing, the Court
hereby renders judgement ordering defendant
Concepcion Chua Gaw to pay the [respondent] the
following:
1. P200,000.00 representing the principal obligation with
legal interest from judicial demand or the institution of the
complaint on November 19, 1991;
2. P50,000.00 as attorney’s fees; and
3. Costs of suit.
The defendants’ counterclaim is hereby dismissed for
being devoid of merit.
SO ORDERED.22
The RTC held that respondent is entitled to the payment of the
amount of P200,000.00 with interest. It noted that respondent
personally issued Check No. 240810 to petitioner and her
husband upon their request to lend them the aforesaid amount.
The trial court concluded that the P200,000.00 was a loan
advanced by the respondent from his own funds and not
remunerations for services rendered to Hagonoy Lumber nor
petitioner’s advance share in the profits of their parents’
businesses.  petitioner went on a fishing expedition, the taking of respondent’s
The trial court further held that the validity and due execution of
the Deed of Partition and the Deed of Sale, evidencing transfer of
ownership of Hagonoy Lumber from Chua Sioc Huan to
16
respondent, was never impugned. Although respondent failed to
produce the originals of the documents, petitioner judicially
admitted the due execution of the Deed of Partition, and even
acknowledged her signature thereon, thus constitutes an
exception to the best evidence rule. As for the Deed of Sale,
since the contents thereof have not been put in issue, the non-
presentation of the original document is not fatal so as to affect its
authenticity as well as the truth of its contents. Also, the parties to
the documents themselves do not contest their validity.
Ultimately, petitioner failed to establish her right to demand an
accounting of the operations of Hagonoy Lumber nor the delivery
of her 1/6 share therein. 
As for petitioner’s claim that an accounting be done on Capitol
Sawmill Corporation and Columbia Wood Industries, the trial
court held that respondent is under no obligation to make such an
accounting since he is not charged with operating these
enterprises.23
Aggrieved, petitioner appealed to the CA, alleging that the trial
court erred (1) when it considered the amount of P200,000.00 as
a loan obligation and not Concepcion’s share in the profits of
Hagonoy Lumber; (2) when it considered as evidence for the
defendant, plaintiff’s testimony when he was called to testify as
an adverse party under Section 10 (e), Rule 132 of the Rules of
Court; and (3) when it considered admissible mere copies of the
Deed of Partition and Deed of Sale to prove that respondent is
now the owner of Hagonoy Lumber.24
On May 23, 2003, the CA affirmed the Decision of the
RTC. 25 The appellate court found baseless the petitioner’s
argument that the RTC should not have included respondent’s
testimony as part of petitioner’s evidence. The CA noted that the
testimony having taken up a total of eleven hearings, and upon
failing to obtain favorable information from the respondent, she
now disclaims the same. Moreover, the CA held that the
petitioner failed to show that the inclusion of respondent’s
testimony in the statement of facts in the assailed decision unduly
prejudiced her defense and counterclaims. In fact, the CA noted
that the facts testified to by respondent were deducible from the
totality of the evidence presented.  ESTABLISHED SUPREME COURT DECISIONS
The CA likewise found untenable petitioner’s claim that Exhibits
"H" (Deed of Sale) and Exhibit "I" (Deed of Partition) were merely
temporary paper arrangements. The CA agreed with the RTC that
the testimony of petitioner regarding the matter was
uncorroborated — she should have presented the other heirs to
attest to the truth of her allegation. Instead, petitioner admitted
the due execution of the said documents. Since petitioner did not
dispute the due execution and existence of Exhibits "H" and "I",
there was no need to produce the originals of the documents in
accordance with the best evidence rule.26
On December 2, 2003, the CA denied the petitioner’s motion for
reconsideration for lack of merit.27
Petitioner is before this Court in this petition for review
on certiorari, raising the following errors:
I. THAT ON THE PRELIMINARY IMPORTANT RELATED
ISSUE, CLEAR AND PALPABLE LEGAL ERROR HAS
BEEN COMMITTED IN THE APPLICATION AND LEGAL
SIGNIFICANCE OF THE RULE ON EXAMINATION OF
ADVERSE PARTY OR HOSTILE WITNESS UNDER
SECTION 10 (d) AND (e) OF RULE 132, CAUSING
SERIOUS DOUBT ON THE LOWER COURT’S
APPEALED DECISION’S OBJECTIVITY, ANNEX "C".
II. THAT ON THE IMPORTANT LEGAL ISSUE
RELATIVE TO THE AFORESAID TWO OPPOSING
CLAIMS OF RESPONDENT AND PETITIONER, CLEAR
AND PALPABLE LEGAL ERROR HAS BEEN
COMMITTED UNDER THE LOWER COURT’S
DECISION ANNEX "C" AND THE QUESTIONED
17
DECISION OF MAY 23, 2003 (ANNEX "A") AND THE
RESOLUTION OF DECEMBER 2, 2003, (ANNEX "B") IN
DEVIATING FROM AND DISREGARDING
ENJOINING COURTS NOT TO OVERLOOK OR
MISINTERPRET IMPORTANT FACTS AND
CIRCUMSTANCES, SUPPORTED BY CLEAR AND
CONVINCING EVIDENCE ON RECORD, AND WHICH
ARE OF GREAT WEIGHT AND VALUE, WHICH WOULD
CHANGE THE RESULT OF THE CASE AND ARRIVE AT
A JUST, FAIR AND OBJECTIVE DECISION. (Citations
omitted)
III. THAT FINALLY, AS TO THE OTHER LEGAL
IMPORTANT ISSUE RELATIVE TO CLAIM OR
OWNERSHIP OF THE "Hagonoy Lumber" FAMILY
BUSINESS, CLEAR AND PALPABLE LEGAL ERROR
HAS BEEN COMMITTED ON THE REQUIREMENTS
AND CORRECT APPLICATION OF THE "BEST
EVIDENCE RULE" UNDER SECTION 3, RULE 130 OF
THE REVISED RULES OF COURT.28
The petition is without merit. 
Petitioner contends that her case was unduly prejudiced by the
RTC’s treatment of the respondent’s testimony as adverse
witness during cross-examination by his own counsel as part of
her evidence. Petitioner argues that the adverse witness’
testimony elicited during cross-examination should not be
considered as evidence of the calling party. She contends that
the examination of respondent as adverse witness did not make
him her witness and she is not bound by his testimony,
particularly during cross-examination by his own counsel.29 In
particular, the petitioner avers that the following testimony of the
respondent as adverse witness should not be considered as her
evidence:
 (11.a) That RESPONDENT-Appellee became owner of
the "HAGONOY LUMBER" business when he bought the
same from Chua Sioc Huan through a Deed of Sale dated
August 1, 1990 (EXH.H);
(11.b) That the "HAGONOY LUMBER," on the other
hand, was acquired by the sister Chua Sioc Huan, by
virtue of Extrajudicial Partition and Renunciation of
Hereditary Rights in favor of a Co-Heir (EXH. I);
(11.c) That the 3 lots on which the "HAGONOY LUMBER"
business is located were acquired by Lu Pieng from the
Santos family under the Deed of Absolute Sale (EXH. J);
that Lu Pieng sold the Lots to Chua Suy Lu in 1976
(EXHS. K, L, & M.); that Chua Siok Huan eventually
became owner of the 3 Lots; and in 1989 Chua Sioc Huan
sold them to RESPONDENT-Appellee (EXHS. Q and P);
that after he acquired the 3 Lots, he has not sold them to
anyone and he is the owner of the lots.30
We do not agree that petitioner’s case was prejudiced by the
RTC’s treatment of the respondent’s testimony during cross-
examination as her evidence.  provides that the party calling an adverse witness shall not be
If there was an error committed by the RTC in ascribing to the
petitioner the respondent’s testimony as adverse witness during
cross-examination by his own counsel, it constitute a harmless
error which would not, in any way, change the result of the case. 
In the first place, the delineation of a piece of evidence as part of
the evidence of one party or the other is only significant in
determining whether the party on whose shoulders lies the
burden of proof was able to meet the quantum of evidence
needed to discharge the burden. In civil cases, that burden
devolves upon the plaintiff who must establish her case by
preponderance of evidence. The rule is that the plaintiff must rely
on the strength of his own evidence and not upon the weakness
18
of the defendant’s evidence. Thus, it barely matters who with a
piece of evidence is credited. In the end, the court will have to
consider the entirety of the evidence presented by both parties.
Preponderance of evidence is then determined by considering all
the facts and circumstances of the case, culled from the
evidence, regardless of who actually presented it.31
That the witness is the adverse party does not necessarily mean
that the calling party will not be bound by the former’s testimony.
The fact remains that it was at his instance that his adversary was
put on the witness stand. Unlike an ordinary witness, the calling
party may impeach an adverse witness in all respects as if he had
been called by the adverse party,32 except by evidence of his bad
character.33 Under a rule permitting the impeachment of an
adverse witness, although the calling party does not vouch for the
witness’ veracity, he is nonetheless bound by his testimony if it is
not contradicted or remains unrebutted.34
A party who calls his adversary as a witness is, therefore, not
bound by the latter’s testimony only in the sense that he may
contradict him by introducing other evidence to prove a state of
facts contrary to what the witness testifies on.35 A rule that
bound by his testimony does not mean that such testimony may
not be given its proper weight, but merely that the calling party
shall not be precluded from rebutting his testimony or from
impeaching him.36 This, the petitioner failed to do. 
In the present case, the petitioner, by her own testimony, failed to
discredit the respondent’s testimony on how Hagonoy Lumber
became his sole property. The petitioner admitted having signed
the Deed of Partition but she insisted that the transfer of the
property to Chua Siok Huan was only temporary. On cross-
examination, she confessed that no other document was
executed to indicate that the transfer of the business to Chua
Siok Huan was a temporary arrangement. She declared that,
after their mother died in 1993, she did not initiate any action
concerning Hagonoy Lumber, and it was only in her counterclaim
in the instant that, for the first time, she raised a claim over the
business.  in the appellate court.
Due process requires that in reaching a decision, a tribunal must
consider the entire evidence presented.37 All the parties to the
case, therefore, are considered bound by the favorable or
unfavorable effects resulting from the evidence.38 As already
mentioned, in arriving at a decision, the entirety of the evidence
presented will be considered, regardless of the party who offered
them in evidence. In this light, the more vital consideration is not
whether a piece of evidence was properly attributed to one party,
but whether it was accorded the apposite probative weight by the
court. The testimony of an adverse witness is evidence in the
case and should be given its proper weight, and such evidence
becomes weightier if the other party fails to impeach the witness
or contradict his testimony.  heirs freely renounced and waived in favor of their sister Chua
Significantly, the RTC’s finding that the P200,000.00 was given to
the petitioner and her husband as a loan is supported by the
evidence on record. Hence, we do not agree with the petitioner’s
contention that the RTC has overlooked certain facts of great
weight and value in arriving at its decision. The RTC merely took
into consideration evidence which it found to be more credible
than the self-serving and uncorroborated testimony of the
petitioner.
At this juncture, we reiterate the well-entrenched doctrine that the
findings of fact of the CA affirming those of the trial court are
accorded great respect, even finality, by this Court. Only errors of
law, not of fact, may be reviewed by this Court in petitions for
review on certiorari under Rule 45.39 A departure from the general
rule may be warranted where the findings of fact of the CA are
contrary to the findings and conclusions of the trial court, or when
the same is unsupported by the evidence on record.40 There is no
reason to apply the exception in the instant case because the
findings and conclusions of the CA are in full accord with those of
the trial court. These findings are buttressed by the evidence on
record. Moreover, the issues and errors alleged in this petition are
19
substantially the very same questions of fact raised by petitioner
On the issue of whether the P200,000.00 was really a loan, it is
well to remember that a check may be evidence of
indebtedness.41 A check, the entries of which are in writing, could
prove a loan transaction.42 It is pure naiveté to insist that an
entrepreneur who has several sources of income and has access
to considerable bank credit, no longer has any reason to borrow
any amount.
The petitioner’s allegation that the P200,000.00 was advance on
her share in the profits of Hagonoy Lumber is implausible. It is
true that Hagonoy Lumber was originally owned by the parents of
petitioner and respondent. However, on December 8, 1986, the
Sioc Huan all their hereditary shares and interest therein, as
shown by the Deed of Partition which the petitioner herself
signed. By virtue of this deed, Chua Sioc Huan became the sole
owner and proprietor of Hagonoy Lumber. Thus, when the
respondent delivered the check for P200,000.00 to the petitioner
on June 7, 1988, Chua Sioc Huan was already the sole owner of
Hagonoy Lumber. At that time, both petitioner and respondent no
longer had any interest in the business enterprise; neither had a
right to demand a share in the profits of the business.
Respondent became the sole owner of Hagonoy Lumber only
after Chua Sioc Huan sold it to him on August 1, 1990. So, when
the respondent delivered to the petitioner the P200,000.00 check
on June 7, 1988, it could not have been given as an advance on
petitioner’s share in the business, because at that moment in time
both of them had no participation, interest or share in Hagonoy
Lumber. Even assuming, arguendo, that the check was an
advance on the petitioner’s share in the profits of the business, it
was highly unlikely that the respondent would deliver a check
drawn against his personal, and not against the business
enterprise’s account.
It is also worthy to note that both the Deed of Partition and the
Deed of Sale were acknowledged before a Notary Public. The
notarization of a private document converts it into a public
document, and makes it admissible in court without further proof
of its authenticity.43 It is entitled to full faith and credit upon its
face.44 A notarized document carries evidentiary weight as to its
due execution, and documents acknowledged before a notary
public have in their favor the presumption of regularity. Such a
document must be given full force and effect absent a strong,
complete and conclusive proof of its falsity or nullity on account of
some flaws or defects recognized by law.45 A public document
executed and attested through the intervention of a notary public
is, generally, evidence of the facts therein express in clear
unequivocal manner.46
Petitioner, however, maintains that the RTC erred in admitting in
evidence a mere copy of the Deed of Partition and the Deed of
Sale in violation of the best evidence rule. In addition, petitioner
insists that the Deed of Sale was not the result of bona
fide negotiations between a true seller and buyer.  reduced to writing, it is deemed to contain all the terms agreed
The "best evidence rule" as encapsulated in Rule 130, Section
3,47 of the Revised Rules of Civil Procedure applies only when the
content of such document is the subject of the inquiry. Where the
issue is only as to whether such document was actually executed,
or exists, or on the circumstances relevant to or surrounding its
execution, the best evidence rule does not apply and testimonial
evidence is admissible. Any other substitutionary evidence is
likewise admissible without need to account for the
original.48 Moreover, production of the original may be dispensed
with, in the trial court’s discretion, whenever the opponent does
not bona fide dispute the contents of the document and no other
useful purpose will be served by requiring production.49
Accordingly, we find that the best evidence rule is not applicable
to the instant case. Here, there was no dispute as to the terms of
either deed; hence, the RTC correctly admitted in evidence mere
copies of the two deeds. The petitioner never even denied their
20
due execution and admitted that she signed the Deed of
Partition.50 As for the Deed of Sale, petitioner had, in effect,
admitted its genuineness and due execution when she failed to
specifically deny it in the manner required by the rules.51 The
petitioner merely claimed that said documents do not express the
true agreement and intention of the parties since they were only
provisional paper arrangements made upon the advice of
counsel.52 Apparently, the petitioner does not contest the contents
of these deeds but alleges that there was a contemporaneous
agreement that the transfer of Hagonoy Lumber to Chua Sioc
Huan was only temporary.
An agreement or the contract between the parties is the formal
expression of the parties’ rights, duties and obligations. It is the
best evidence of the intention of the parties.53 The parties’
intention is to be deciphered from the language used in the
contract, not from the unilateral post facto assertions of one of the
parties, or of third parties who are strangers to the
contract.54 Thus, when the terms of an agreement have been
upon and there can be, between the parties and their successors
in interest, no evidence of such terms other than the contents of
the written agreement.55
WHEREFORE, premises considered, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. CV No. 66790 dated
May 23, 2003 and Resolution dated December 2, 2003
are AFFIRMED.
SO ORDERED.

5. G.R. No. L-5791 December 17, 1910
THE UNITED STATES, plaintiff-appellee,  complaint. By reason of this claim and petition the judgment
vs.
BERNARDO GREGORIO and EUSTAQUIO
BALISTOY, defendants-appellants.  attached for the sum of P300, and both were adjudicated to the
Albert E. Somersille, for appellant Gregorio. 
Cayetano Hipolito, for appellant Balistoy.  In order that the claim of intervention presented to the sheriff
Attorney-General Villamor, for appellee.  might prosper, Bernardo Gregorio attached thereto the document
TORRES, J.:
Appeals were interposed by the defendants Bernardo Gregorio
and Eustaquio Balistoy from the judgment rendered in the two
causes prosecuted, No. 1574, against Bernardo Gregorio, and
No. 1575, against Eustaquio Balistoy, which were consolidated
and in which but one judgment was rendered, and forwarded to
this court and registered under No. 5791. 
In the suit instituted by Pedro Salazar, as a creditor, against
Eustaquio Balistoy, in the justice of the peace court of Libog, for
the payment of a certain sum of money, judgment was rendered,
on April 4, 1908, wherein the debtor was sentenced to pay to the
21
plaintiff P275.92, with interest thereon, and the costs. For the
execution of the said judgment, two rural properties belonging to
the debtor were attached and the 27th of May, 1908, was set as
the date for the sale and adjudication of the said attached
properties to the highest bidder. On the 18th of the same month,
Bernardo Gregorio requested the deputy sheriff to exclude the
said realty from the attachment, alleging that he was the owner of
the land situated in Tambogon, one of the properties levied upon,
400 brazas in circumference, situate in the pueblo of Bacacay,
the location and boundaries of which are expressed in his
petition, for the reason that he had acquired it by purchase from
the judgment debtor, Balistoy, in 1905, prior to the filing of the
creditor, Salazar, had to give a bond, in view of which the sheriff
proceeded with the sale of the said property, and of another, also
judgment creditor, according to the certificate, Exhibit C.
lawphil.net
Exhibit D, at the end of which and among other particulars
appears the memorandum dated in Libog as of February 22,
1905, and signed by Eustaquio Balistoy, Lorenzo Gregorio, and
Cirilo Valla, and in which Balistoy states that he bought the land
referred to in the said document from Luis Balistoy and sold it to
Bernardo Gregorio for P300, wherefore he signed as such
vendor. 
The charge consists in that Balistoy, with intent to injure his
creditor, Pedro Salazar, and for the purpose of avoiding the
attachment and sale of one of the properties belonging to him, to
secure the payment of the judgment obtained by his creditor in
the aforementioned suit, did, with disregard of the truth in the
narration of the facts, execute or write the said memorandum
whereby, on February 25, 1905, he made or simulated a
conveyance of one of the attached properties in favor of the said
Bernardo Gregorio, according to the aforesaid copy, when in fact
the said memorandum was written in April, 1908. 
For the foregoing reasons a complaint was filed in each of the two
aforesaid causes in the Court of First Instance of Albay, charging
each of the defendants with the crime of the falsification of a
private document, and proceedings having been instituted in both
causes, which were afterwards, by agreement of the parties
thereto, consolidated, the court, on November 6, 1909,
pronounced in both of them the judgment appealed from, written
in duplicate, whereby Balistoy was sentenced to the penalty of
one year eight months and twenty-one days of presidio
correccional, to the accessory penalties, to pay a fine of 1,501
pesetas, and, in case of nonpayment thereof through insolvency,
to suffer the corresponding subsidiary imprisonment, provided it
should not exceed one-third of the principal sentence, and to pay
the costs incurred in cause No. 1575; and likewise, Bernardo
Gregorio was sentenced to the penalty of three months and
eleven days of arresto mayor, to pay a fine of 1,980 pesetas, and,
in case of insolvency, to the corresponding subsidiary
imprisonment, with the provision that it should not exceed one-
third of the principal penalty, to the accessory punishments, and
to pay the costs occasioned by cause No. 1574. From these
sentences the defendants, respectively, appealed.  documents and proceedings such as are recorded in notarial
This case concerns the falsity of a document alleged to have
been written on a date prior to the one when it actually was
prepared, which instrument simulates the sale of a parcel of land
by its owner to a third party, with the intent to defraud the creditor
who, through proper judicial process, solicited and obtained the
attachment and sale of the said property in order, with the
proceeds of such sale, to recover the amount which the owner of
the land owed him.
The sale was recorded in a memorandum, made upon a private
document, according to the alleged copy of the latter presented at
trial which belonged to the owner of land; and, notwithstanding
the fact that the sheriff, who carried out the proceedings of
attachment and sale, testified to his having seen the original of
the said document, or at least the original memorandum of the
conveyance, the only record that could be of use to the
22
intervener, who claimed a lien on the land which was to be sold at
public auction; certainly the mere exhibition of a copy of an
unauthenticated private document could not legally produce the
effect of suspending the sale of the said land, inasmuch as such
copy is not sufficient proof of the right of the intervener and
opponent, being e mere copy of a private document whose
legality has not been proven. 
In the charge filed in this cause against the vendor and the
vendee of the land in question, it is stated that these parties, the
defendants, simulated the said memorandum of sale or
conveyance of the land with the intent to injure the creditor, Pedro
Salazar; but as the original document, setting forth the said
memorandum, was not presented, but merely a copy thereof, and
furthermore, as it could not be ascertained who had the original of
the document containing the memorandum in question, nor the
exact date when the latter was written; the said memorandum,
presumed to be simulated and false, was not literally compared
by the sheriff who testified that he had seen its original for but a
few moments, nor by any officer authorized by law to certify to
instruments, nor even by two witnesses who might afterwards
have been able to testify before the court that the copy exhibited
was in exact agreement with its original; therefore, on account of
these deficiencies, doubt arises as to whether the original of the
document, Exhibit D, really existed at all, and whether the
memorandum at the foot of the said exhibit is an exact copy of
that alleged to have been written at the end of the said original
document.  lawphil.net
In criminal proceedings for the falsification of a document, it is
indispensable that the judges and courts have before them the
document alleged to have been simulated, counterfeited, or
falsified, in order that they may find, pursuant to the evidence
produced in the cause, whether or not the crime of falsification
was committed, and also, at the same time, to enable them to
determine the degree of each defendant's liability in the
falsification under prosecution. Through the lack of the original
document containing the memorandum alleged to be false, it is
improper to hold, with only a copy of the said original in view, that
the crime prosecuted was committed; and although, judging from
the testimony of the witnesses who were examined in the two
consolidated causes, there is reason to entertain much doubt as
to the defendants' innocence, yet, withal, this case does not
furnish decisive and conclusive proof of their respective guilt as
coprincipals of the crime charged. Defendants in a criminal cause
are always presumed to be innocent until their guilt be fully
proven, and, in case of reasonable doubt and when their guilt is
not satisfactorily shown, they are entitled to a judgment of
acquittal. In view of the evidence produced in both of the
aforesaid criminal causes, said causes can only be terminated by
such a finding. 

For the foregoing reasons, it is proper, in our opinion, with a

reversal of the judgment appealed from, to acquit, and we hereby
do acquit Eustaquio Balistoy and Bernardo Gregorio, with the
costs of both instances de oficio. So ordered.

23

6. G.R. No. L-35366             August 5, 1931
THE PROVINCIAL FISCAL OF PAMPANGA, petitioner,  sustained by the court.
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).
24
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
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.
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.

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

25
 "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
8. G.R. No. L-28999 May 24, 1977 ship's tackle. The service is usually performed by longshoremen. 

COMPAÑIA MARITIMA, plaintiff-appellee,  On the other hand, stevedoring refers to the handling of the cargo
vs. in the holds of the vessel or between the ship's tackle and the
ALLIED FREE WORKERS UNION, SALVADOR T. LLUCH, holds of the vessel. 
MARIANO LL. BADELLES, individually and in their capacities
as President and Vice-President, respectively of the Allied The shippers and consignees paid the union oth for the arrastre
Free Workers Union, NICANOR HALEBAS and LAURENTINO work. They refused to pay for the stevedoring service. They
LL. BADELLES, individually and officers of Allied Free claimed that the shipowner was the one obligated to pay for the
stevedoring service because the bill of lading provided that the
On August 11, 1952 the Compañia Maritima and the Allied Free unloading of the cargo was at the shipowner's expense (Exh. 1). 
Workers Union entered into a written contract whereby the union
agreed to perform arrastre and stevedoring work for the On the other hand, the company refused to pay for the
consignees. vessels at Iligan City. The contract was to be stevedoring service because the contract (Exh. J) explicitly
effective for one month counted from August 12, 1952.  provided that the compensation for both arrastre and stevedoring
work should be paid by the shippers and consignees, as was the
It was stipulated that the company could revoke the contract alleged practice in Iligan City, and that the shipowner would not
before the expiration of the term if the union failed to render be liable for the payment of such services. 
proper service. The contract could be renewed by agreement of
the parties (Exh. J).  Thus, the issue of whether the company should pay for the
stevedoring service became a sore point of contention between
At the time the contract was entered into, the union had just been the parties. The union members labored under the impression
organized. Its primordial desire was to find work for its members. that they were not being compensated for their stevedoring
The union agreed to the stipulation that the company service as distinguished from arrastre service. 
would not be liable for the payment of the services of the union

26
Although the arrastre and stevedoring contract (Exh. J) was On the following day, September 9, the lower court issued ex
disadvantageous to the union, it did not terminate the contract parte a writ of preliminary injunction after the company had
because its members were in dire need of work and work, which posted a bond in the sum of P20,000. A few hours lateron that
was not adequately compensated, was preferable to having no same day the union was allowed to file a counterbond. The
work at all (204, 214-5, 226-7 tsn May 20, 1960).  injunction was lifted. The union members resumed their arrastre
and stevedoring work. 
Upon the expiration of the one-month period, the said contract
was verbally renewed. The company allowed the union to Later, the union assailed in a prohibition action in this Court the
continue performing arrastre and stevedoring work.  jurisdiction of the trial court to entertain the action for damages,
and injunction. 
On July 23, 1954 the union sent a letter to the company
requesting that it be recognized as the exclusive bargaining unit A majority of this Court held that the lower court had jurisdiction to
to load and unload the cargo of its vessels at Iligan City. The issue the injunction and to take cognizance of the damage suit
company ignored that demand. So, the union filed on August 6, filed by the company but that the injunction was void because it
1954 in the Court of Industrial Relations (CIR) a petition praying was issued ex parte and the procedure laid down in section 9(d)
that it be certified as the sole collective bargaining unit. of Republic Act No. 875 was not followed by the trial court (Allied
Free Workers Union vs. Judge Apostol, 102 Phil. 292, 298). 
Despite that certification case, the company on August 24, 1954
served a written notice on the union that, in accordance with After trial, the lower court rendered a decision dated December 5,
payment of the 1952 contract, the same would be terminated on 1960, amended on January 11, 1961, (1) declaring the arrastre
August 31, 1954. Because of that notice, the union on August 26, and stevedoring contract terminated on August $1, 1954; (2)
1954 filed in the CIR charges of unfair labor practice against the dismissing the union's counterclaim; (3) ordering the union and its
company.  officers to pay solidarily to the company P520,000 as damages,
with six percent interest per annum from September 9, 1954,
On August 31, 1954 the company entered into a new stevedoring when the complaint. was filed; (4) permanently enjoining the
and arrastre contract with the Iligan Stevedoring Association. On union from performing any arrastre and stevedoring work for the
the following day, September 1, the union members picketed the company at Iligan City, and (5) requiring the union to post a
wharf and prevented the Iligan Stevedoring Association from supersedeas bond in the sum of P520,000 to stay execution. 
performing arrastre and stevedoring work. The picket lasted for
nine days.  The union filed a motion for reconsideration. On the other hand,
the company filed a motion for the execution pending appeal of
On September 8, 1954 the company sued the union and its the money judgment. It filed another motion for the immediate
officers in the Court of First Instance of Lanao for the rescission issuance of a writ of injunction. That second motion was filed in
of the aforementioned 1952 contract, to enjoin the union from the municipal court of Iligan City in view of the absence of the
interfering with the loading and unloading of the cargo, and for the District Judge. 
recovery of damages. 

27
The municipal court issued the writ of injunction. However, this 1,620,000 as damages, consisting of the lost earnings during the
Court set it aside because it was not an interlocutory order and no four-years period from May 8, 1962 to May 8, 1966. 
special reasons were adduced to justify its issuance (Allied Free
Workers Union vs. Judge Estipona, 113 Phil. 748).  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
The union on January 6, 1961 had perfected an appeal from the judgment as to the damages, of P520,000 and the permanent
lower court's original decision. It did not appeal from injunction. 
the amended decision. On March 24, 1962 the lower court issued
an order declaring its amended decision final and executory in Later, the company called the lower court's attention to this
view of the union's failure to appeal therefrom. The court directed Court's decision dated January 31, 1967. In that decision, this
the clerk of court to issue a writ of execution. That order was Court affirmed the CIR's decision holding that the company did
assailed by the union in a certiorari action filed in this Court. A not commit any unfair labor practice and reversed the CIR's
preliminary injunction was issued by this Court to restrain the directive that a certification election be held to determine whether
execution of the judgment.  the union should be the exonemtod bargaining unit. This Court
held that the union could not act as a collective bargaining unit
On May 16, 1962 this Court dissolved the injunction at the because the union was an independent contractor and its
instance of the company which had filed a counterbond. members were not employees of the company (Allied Free
Thereupon, the 225 members of the union yielded their ten-year Workers Union vs. Compañia Maritima, L-22951-2 and L-22971,
old jobs to the new set of workers contracted by the company.  19 SCRA 258). 

The certiorari incident was decided on June 30, 1966. This Court The lower court in its order of April 25, 1967 (1) denied the
noted that the lower court amended its decision for the purpose of union's motion for restitution and to stay execution of its amended
correcting certain errors and omissions which were not decision on January 11, 1961 and (2) required the union to file a
substantial in character and that its amended decision was supersedeas bond in the sum of P100,000 within thirty days from
served upon the parties after the union had perfected its appeal notice. The bond was reduced to P50,000 in the lower court's
from the original decision.  order of August 16, 1967. The union posted the bond on August
24,1967. 
Under those circumstances, this Court held that the union's
appeal should be given due coarse, subject to the amendment of The lower court approved the union's amended record on appeal
its record on appeal. This Court reserved to the members of the in its order of October 6, 1967. 
union the right to secure restitution under sections 2 and 5, Rule
39 of the Rules of Court (Allied Free Workers Union vs. Estipona, The union appealed directly to this Court because the amount
L-19651, June 30, 1966,17 SCRA 513, 64 O.G. 2701).  involved exceeds P200,000. The appeal was perfected before
Republic Act No. 5440 took effect on September 9,1968.
Pursuant to that reservation, the union on December 16, 1966
filed a motion for restitution, praying that its 225 members be Other proceedings. - The company in its original complaint
restored to their jobs and that the company be ordered to pay P prayed that the union and its officials be ordered to pay actual

28
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 (10-
12, Record on Appeal).  to the Iligan Stevedoring Association which the company had
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).  branch manager at Iligan City, testified that on August 24, 1954
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
29
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
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.
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 for January 1 to August 31, 1954, Statement A  
hired auditors to ascertain the losses suffered by the company
during the period from January 1 to September 11, 1954.  in Exh. A, of CPA Jayme ......................... 4,339.64 

The trial court awarded actual damages, amounting to P450,000 (3) Lost freight on shutout cargoes for   
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 September 2 to 7, 1954 booked for shipment in  
impression, Exhibits B, C and D are not auditors' reports. 
M. V. Mindoro, Panay and Masterhead Knot,   
The trial court did not bother to make a breakdown of the alleged
damages, totalling P450,000. The reports of the two hired Statement B in Exh. A, CPA Jayme's report... 6,167.16 
accountants, Demetrio S. Jayme and M. J. Siojo, show the
following alleged damages, in the aggregate amount of (4) Losses sustained in voyages of M.V.   
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 COMPAÑIA MARITIMA 
3,764.50 

(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,   
10,000.00
1954, Statement A in Exh. A, CPA Jayme's   
 
report......................................................... P29,900.40
 
(2) Lost freight on other shutout cargoes   

30
    

   

4,407.50 5,677.54 

   

  17,838.78 

   

100,000.00 3,520.90

  3,849.56 

   

20,000.00  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 
62,680.12
(18) Lost freight revenue for 1958, Exh. H-  
 
2............................................................. 10,193.46 
20,000.00 
(19) Forklift operating expenses. for 1959,   

31
 Appellants' statement of facts. - To sustain their appeal, the
Exh. I-1....................................................  8,745.35 appellants made the following exceedingly short and deficient
recital of the facts: 
(20) Lost freight revenue for 1959, Exh. I-2  7,959.83
Sometime in the month of August, 1954,
T OT A L - P349,245.37 defendant, Allied Free Workers Union filed an
unfair labor practice case against defendant
(should be plaintiff) and its branch manager, Mr.
We tabulated the alleged damages, to show that the trial court's
Jose Teves, with the Court of Industrial Relations,
award to the company of P450,000 as damages, is not supported
Manila, and docketed as Case No. 426-UPL:
by the evidence. On the other hand, the statement of the
defendant union also filed a petition for
consignees. counsel that the damages, totalled P412,663.17
certification election docketed as Case No, 175-
(162- 164 tsn March 11, 1960) is wrong. 
MC against plaintiff; defendant union also filed a
notice of strike dated August 27, 1954; the
Teves, the consignees. branch manager, submitted a statement Secretary of Labor wired the public defender,
(Exh. K) showing the alleged cost of three forklifts, 200 pieces of Iligan City, on August 27, 1954 (see annexes 1-4,
pallet boards, 530 pieces of wire rope slings and two pieces of motion to dismiss, Record on Appeal, pp. 54-65). 
tarpaulins in the total sum of P27,215. In that statement, he
claims that the damages, to the company by reason of the
To counteract these legitimate moves of labor,
depreciation of the said items of equipment amounted to P38,835
plaintiff filed the complaint docketed as Civil Case
or more than the cost thereof. 
No. 577 in the Court of First Instance of Lanao
(now Lanao del Norte) for damages, and/or
The company's counsel, in his summary of the damages, ignored resolution of contract with writ of preliminary
the alleged damages, of P38,835 indicated by Teves in Exhibit K. injunction, On a decision adverse to their
The consignees. counsel relied oth on the auditors' reports, interests, defendants take this appeal. 
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,
On the question of jurisdiction taken before this
claimed by the company amounted to P349,245.37. 
Honorable Tribunal in G.R. No. L-8876, it was
held: 
The best evidence on the cost of the said equipment would have
been the sales invoices instead of the oral testimony of Teves. He
... for the instant case merely refers to the
did not produce the sales invoices. 
recovery of damages, occasioned by the picketing
undertaken by the members of the union and the
Teves further testified that Salvador T. Lluch was the president of rescission of the arrastre and stevedoring contract
the union; Nicanor Halibas, the treasurer; Mariano Badelles, the previously entered into between the parties. 
general manager, and Luarentino Badelles, a vice president. 

32
The appellants did not discuss their oral and documentary It is also a requisite for the application of the rule that the records
evidence. * and accounts should be made accessible to the adverse party so
that the company, of the summary may be tested on cross-
First assignment of error. - The appellants contend that the trial examination (29 Am Jur 2nd 517-8; 32A C.J.S. 111). 
court erred in awarding to the company actual damages,
amounting to P450,000, moral damages, of P50,000 and What applies to this case is the general rule "that an audit made
attorney's Considering of P20,000, and in holding that the four by, or the testimony of, a private auditor, is inadmissible in
officers of the union are solidarily liable for the said damages. evidence as proof of the original records, books of accounts,
reports or the like" (Anno 52 ALR 1266). 
Appellants' counsel assailed the award of actual damages, on the
ground that the auditors' reports, on which they were based, were That general rule cannot be relaxed in this case because the
hearsay.  company failed to make a preliminary showing as to the difficulty
or impossibility attending the production of the records in court
After analyzing the nature of the damages, awarded, how the and their examination and analysis as evidence by the court (29
same were computed, and the trustworthiness of the company's Am Jur 2nd 529). 
evidence, we find the first assignment of error meritorious. 
A close scrutiny of the accountants' reports reveals their lack of
We have already stress that, on the basis of the reports of the two probative value. The propriety of allowing the different items of
accountants, the damages, claimed by the complaint as a matter damages, is discussed below. 
of simple addition, does not reach the sum of P 450,000 fixed by
the trial court. The damages, shown in the accountants' reports Unrealized freight and passenger revenue for 1954 ascertained
and in the statement made by the consignees. chief clerk (who by Accountant Demetrio S. Jayme. - In his report (Exh. A, pp. 134
did not testify) amount to P349,245.37, or much less than to 147, Record on Appeal), Jayme used the pronouns "we" and
P450,000.  "our" and made reference to the examination made by the
"auditors" and his accounting office. 
The company argues that the accountants' reports are admissible
in evidence because of the rule that "when the original consists of He did not disclose the names of other "auditors" who assisted
numerous accounts or other documents which cannot be him in making the examination of the consignees. records. 
examined in court without great loss-of time and the fact sought
to be established from them is oth the general result of the He gave the impression that he was an independent accountant
whole", the original writings need not be produced (Sec. 2[e], hired by the company to make a "special investigation" of the
Rule 130, Rules of Court).  consignees. losses for the period from January 1 to September 7,
1954. 
That rule cannot be applied in this case because the voluminous
character of the records, on which the accountants' reports were The truth is that Jayme was a "personal friend" of Teves, the
based, was not duly established (U. S. vs. Razon and Tayag, 37 consignees. branch manager at Iligan City. Teves was the
Phil. 856, 861; 29 Am Jur 2nd 529).  consignees. principal witness in this case. He verified the

33
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 (217-8 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).  suffered in the operation of the vessels Mindoro and Panay from
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).  August 31, 1954 (items 4, 5 and 6 of the tabulation of damages).
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).  The rule is that the auditor's summary should not include his
34
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 eight-month 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
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
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. 
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 flaw or error in relying merely on Jayme's summaries is that,
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.  example, 50,000 bags of fertilizer), or a shipper had no allotment,
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.  Our conclusion is that an injustice would be perpetrated if the
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.
35
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.
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
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. 
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 The claim is covered by the company's third supplemental
M. Magante, the consignees. chief clerk at Iligan City, in his complaint dated March 9, 1960 wherein it was alleged that due to
statement, Exhibit B (items 9 and 10 of the tabulation of the acts of the union and its officers the company had suffered
damages).  damages, of not less than P25,000 annually since 1955 (320-3,
Record on Appeal). That supplemental complaint was hurriedly
Magante did not testify on his statement. Instead, accountant filed during the trial as directed by the trial court. 
Jayme, substituting for Magante, testified on that statement.
Jayme said that he verified the consignees. records on which The said damages, were computed in the reports of Miguel J.
Magante based his statement. Jayme assured the court that the Siojo, an accountant who, for two days and nights, March 8 to 10,
figures in Magante's statement were supported by the 1960, or shortly before and during the trial, allegedly examined
consignees. records.  the consignees. record at Iligan City, such as its cash book, cash
vouchers, reports to the head office, shipping manifests, and
But as to the damages, of P20,000, Jayme said that he could not liquidation reports. Those records were not produced in court.
certify as to their company, because he had not finished his Their nonproduction was not explained. If the accountant was
investigation (33 tsn March 9, 1955). In spite of that admission, able to summarize the contents of those records in two days, they
the trial court allowed that item of damages. could not have been very voluminous. They should have been
offered in evidence. 
The trial court erred in allowing the damages, totalling P82,680.12
because Magante's statement, Exhibit B, is hearsay. Magante The alleged expenses. in the operation of the forklifts consisted of
should have been proforma. as a witness. Jayme was not (a) the wates of the operators hired by the company and (b) the
competent to take his place since the statement was prepared by cost of gasoline and oil and expenses. for repair. 
Magante, not by Jayme. More appropriate still, the documents
and records on which the statement was based should have been The company's theory is that under the 1952 contract (Exh. J) the
proforma. as evidence or at least brought to the court for union was obligated to provide for forklifts in the loading and
examination by the union's counsel and its accountant. The trial unloading of cargo. Inasmuch as the union allegedly did not have
court required the production of the manifests supporting forklifts, the complaint to expedite the arrastre and stevedoring
Magante's statement (85-86 tsn march 9, 1955). Only one such work, purchase forklifts, hired laborers to operate the same, and
manifest, Exhibit C, was produced. The nonproduction of the paid for the maintenance expenses. The company treated those
other records was not explained.  expenses as losses or damages. 

Lost freight revenue and operating expenses for the forklifts. - Those alleged damages, amounting to P87,986.05 are in the
The company claimed as damages, the sum of P87,986.05 same category as the depreciation allowances amounting to
(P151,403.85 as erroneously computed by the consignees. P38,835 which the company claimed for the forklifts, pallet
counsel, 163 tsn March 11, 1950) consisting of supposed boards, tarpaulins and wire rope slings that it purchased for oth
unrealized freight charges for shutout or unloaded cargoes for the P27,215, We have stated that the consignees. counsel ignored
year 1955 to 1959 (Exh. E to I, Items 11 to 20 of the tabulation of that depreciation in his recapitulation of the damages, claimed by
damages).  the plaintiff. 

36
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.  If to improve the arrastre and stevedoring service, the company
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).  Moral damages and attorney's fees. - Considering that the
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.  Anyway, the company did not plead and prove moral damages. It
The company complained that the union had been rendering
unsatisfactory arrastre and stevedoring services. That grievance
was controverted by the union. 
37
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. 
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. 
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. 
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 That superficial argument is not well-taken. The printed stipulation
awarding attorney's Considering to the company. Hence, the trial in the bill of lading was superseded by the contractual stipulation.
court's award of P20,000 as attorney's Considering is set aside.  The contract was prepared by the union officials. As already
noted, it was stipulated in the contract that the stevedoring and
Appellants' first assignment of error, although not properly argued arrastre charges should be paid by the shippers and consignees
by their counsel, should be sustained.  in consonance with the practice in Iligan City. That stipulation was
binding and enforceable. 
Other assignments of error. - The union and its officers contend
that the lower court erred in dismissing their counterclaims. Their The supposed illegality of that stipulation was not squarely raised
counsel did not even bother to state in their brief the amount of by the union and its officials in their answer. They merely averred
the counterclaims.  that the contract did not express the true agreement of the
parties. They did not sue for reformation of the instrument
The union filed counterclaims for P200,000 as compensation for evidencing the contract. The lower court did not err in dismissing
stevedoring services from August, 1952 to March 4, 1955; defendants' counterclaims. 
P500,000 as deduction P10,000 as attorney's Considering and
P5,000 as premium on the counterbond (251-2, Record on The other two errors assigned by the appellants, namely, that the
Appeal). In their supplemental counterclaim, they demanded lower court erred in issuing a permanent injunction against them
P500,000 as stevedoring charges for the period from March 4, and in executing its decision pending appeal, are devoid of merit. 
1955 to March 4, 1960 and additional damages, of P10,000 (308-
10, Record on Appeal). The trial court dismissed the said The appellants invoke section 9(d) of the Magna Carta of Labor
counterclaims.  regarding the issuance of injunctions. That section has no
application to this case because it was definitively ruled by this
The appellants in their three-sentence argument in support of Court in the certification and unfair labor practice cases that there
their counterclaims alleged that the company's bill of lading is no employer-employee relationship between the company and
provided that the unloading of the cargoes was at the consignees. the stevedores. (They work under the cabo system). 
expense (Exh. 1); that the company had not paid the sum of
P500,000 as compensation for the stevedoring services rendered The lower court did not execute the money aspect of its
by the laborers up to 1960, and that the stipulation in the arrastre judgment. It merely required the defendants to file a supersedeas
contract, "that the Compañia Maritima shall not be liable for the bond of P50,000. 
payment of the services rendered by the Allied Free Workers
Union for the loading and deliveries of cargoes as same is As to the injunction, it should be recalled that it was this Court
payable by the owners and consignees of cargoes, as it has been which, in its resolution of May 16, 1962 in the execution and
the practice in the port of Iligan City" (Exh. J, pp. 14, 334, 359, appeal incident (L-19651, 17 SCRA 513), allowed the company to
500 Record on Appeal), was 'non- operative" and void, "being terminate the stevedoring and arrastre work of the union and to
contrary to morals and public policy".  use another union to perform that work. 

38
The company had the contractual right to terminate the 1952 Chuidian Law Office for plaintiff-appellant.
contract (Taylor vs. Uy Teng Piao, 43 Phil. 873). The lower court Bengzon, Zarraga & Villegas for defendant-appellant / third-party
did not err in sustaining the consignees. rescission of the contract plaintiff-appellant.
and in enjoining the union from performing arrastre and Laurea & Pison for third-party defendant-appellee.
stevedoring work. 
ANGELES, J.:
WHEREFORE, that portion of the trial court's judgment declaring
the arrastre and stevedoring contract terminated, permanently This is a tri-party appeal from the decision of the Court of First
enjoining the union and its officials from performing arrastre and Instance of Manila, Civil Case No. 41845, declaring null and void
stevedoring work for the vessels of the Compañia Maritima, and the sheriff's sale of two certificates of public convenience in favor
dismissing defendants' counterclaim is affirmed.  of defendant Eusebio E. Ferrer and the subsequent sale thereof
by the latter to defendant Pangasinan Transportation Co., Inc.;
The lower court's award of damages, is reversed and set aside. declaring the plaintiff Villa Rey Transit, Inc., to be the lawful
No costs.  owner of the said certificates of public convenience; and ordering
the private defendants, jointly and severally, to pay to the plaintiff,
SO ORDERED. the sum of P5,000.00 as and for attorney's fees. The case against
the PSC was dismissed.

The rather ramified circumstances of the instant case can best be

understood by a chronological narration of the essential facts, to
wit:

Prior to 1959, Jose M. Villarama was an operator of a bus

transportation, under the business name of Villa Rey Transit,
9. G.R. No. L-23893            October 29, 1968
pursuant to certificates of public convenience granted him by the
Public Service Commission (PSC, for short) in Cases Nos. 44213
VILLA REY TRANSIT, INC., plaintiff-appellant,  and 104651, which authorized him to operate a total of thirty-two
vs. (32) units on various routes or lines from Pangasinan to Manila,
EUSEBIO E. FERRER, PANGASINAN TRANSPORTATION and vice-versa. On January 8, 1959, he sold the aforementioned
CO., INC. and PUBLIC SERVICE COMMISSION,defendants.  two certificates of public convenience to the Pangasinan
EUSEBIO E. FERRER and PANGASINAN TRANSPORTATION Transportation Company, Inc. (otherwise known as Pantranco),
CO., INC., defendants-appellants. for P350,000.00 with the condition, among others, that the seller
(Villarama) "shall not for a period of 10 years from the date of this
PANGASINAN TRANSPORTATION CO., INC., third-party sale, apply for any TPU service identical or competing with the
plaintiff-appellant,  buyer."
vs.
JOSE M. VILLARAMA, third-party defendant-appellee.

39
Barely three months thereafter, or on March 6, 1959: a
corporation called Villa Rey Transit, Inc. (which shall be referred
to hereafter as the Corporation) was organized with a capital
stock of P500,000.00 divided into 5,000 shares of the par value of
P100.00 each; P200,000.00 was the subscribed stock; Natividad
R. Villarama (wife of Jose M. Villarama) was one of the
incorporators, and she subscribed for P1,000.00; the balance of
P199,000.00 was subscribed by the brother and sister-in-law of
Jose M. Villarama; of the subscribed capital stock, P105,000.00
was paid to the treasurer of the corporation, who was Natividad
R. Villarama.
In less than a month after its registration with the Securities and
Exchange Commission (March 10, 1959), the Corporation, on
April 7, 1959, bought five certificates of public convenience, forty-
nine buses, tools and equipment from one Valentin Fernando, for
the sum of P249,000.00, of which P100,000.00 was paid upon
the signing of the contract; P50,000.00 was payable upon the
final approval of the sale by the PSC; P49,500.00 one year after
the final approval of the sale; and the balance of P50,000.00
"shall be paid by the BUYER to the different suppliers of the
SELLER."
The very same day that the aforementioned contract of sale was
executed, the parties thereto immediately applied with the PSC
for its approval, with a prayer for the issuance of a provisional
authority in favor of the vendee Corporation to operate the service
therein involved.1 On May 19, 1959, the PSC granted the
provisional permit prayed for, upon the condition that "it may be
modified or revoked by the Commission at any time, shall be
subject to whatever action that may be taken on the basic
application and shall be valid only during the pendency of said
application." Before the PSC could take final action on said
application for approval of sale, however, the Sheriff of Manila, on
July 7, 1959, levied on two of the five certificates of public
convenience involved therein, namely, those issued under PSC
cases Nos. 59494 and 63780, pursuant to a writ of execution
issued by the Court of First Instance of Pangasinan in Civil Case
40
No. 13798, in favor of Eusebio Ferrer, plaintiff, judgment creditor,
against Valentin Fernando, defendant, judgment debtor. The
Sheriff made and entered the levy in the records of the PSC. On
July 16, 1959, a public sale was conducted by the Sheriff of the
said two certificates of public convenience. Ferrer was the highest
bidder, and a certificate of sale was issued in his name.
Thereafter, Ferrer sold the two certificates of public convenience
to Pantranco, and jointly submitted for approval their
corresponding contract of sale to the PSC.2 Pantranco therein
prayed that it be authorized provisionally to operate the service
involved in the said two certificates.
The applications for approval of sale, filed before the PSC, by
Fernando and the Corporation, Case No. 124057, and that of
Ferrer and Pantranco, Case No. 126278, were scheduled for a
joint hearing. In the meantime, to wit, on July 22, 1959, the PSC
issued an order disposing that during the pendency of the cases
and before a final resolution on the aforesaid applications, the
Pantranco shall be the one to operate provisionally the service
under the twocertificates embraced in the contract between
Ferrer and Pantranco. The Corporation took issue with this
particular ruling of the PSC and elevated the matter to the
Supreme Court,3 which decreed, after deliberation, that until the
issue on the ownership of the disputed certificates shall have
been finally settled by the proper court, the Corporation should be
the one to operate the lines provisionally.
On November 4, 1959, the Corporation filed in the Court of First
Instance of Manila, a complaint for the annulment of the sheriff's
sale of the aforesaid two certificates of public convenience (PSC
Cases Nos. 59494 and 63780) in favor of the defendant Ferrer,
and the subsequent sale thereof by the latter to Pantranco,
against Ferrer, Pantranco and the PSC. The plaintiff Corporation
prayed therein that all the orders of the PSC relative to the
parties' dispute over the said certificates be annulled.
In separate answers, the defendants Ferrer and Pantranco
averred that the plaintiff Corporation had no valid title to the
certificates in question because the contract pursuant to which it
acquired them from Fernando was subject to a suspensive
condition — the approval of the PSC — which has not yet been
fulfilled, and, therefore, the Sheriff's levy and the consequent sale
at public auction of the certificates referred to, as well as the sale
of the same by Ferrer to Pantranco, were valid and regular, and
vested unto Pantranco, a superior right thereto.
Pantranco, on its part, filed a third-party complaint against Jose
M. Villarama, alleging that Villarama and the Corporation, are one
and the same; that Villarama and/or the Corporation was
disqualified from operating the two certificates in question by
virtue of the aforementioned agreement between said Villarama
and Pantranco, which stipulated that Villarama "shall not for a
period of 10 years from the date of this sale, apply for any TPU
service identical or competing with the buyer."
Upon the joinder of the issues in both the complaint and third-
party complaint, the case was tried, and thereafter decision was
rendered in the terms, as above stated.
As stated at the beginning, all the parties involved have appealed
from the decision. They submitted a joint record on appeal.
Pantranco disputes the correctness of the decision insofar as it
holds that Villa Rey Transit, Inc. (Corporation) is a distinct and
separate entity from Jose M. Villarama; that the restriction clause
in the contract of January 8, 1959 between Pantranco and
Villarama is null and void; that the Sheriff's sale of July 16, 1959,
is likewise null and void; and the failure to award damages in its
favor and against Villarama.
Ferrer, for his part, challenges the decision insofar as it holds that
the sheriff's sale is null and void; and the sale of
the two certificates in question by Valentin Fernando to the
41
Corporation, is valid. He also assails the award of P5,000.00 as
attorney's fees in favor of the Corporation, and the failure to
award moral damages to him as prayed for in his counterclaim.
The Corporation, on the other hand, prays for a review of that
portion of the decision awarding only P5,000.00 as attorney's
fees, and insisting that it is entitled to an award of P100,000.00 by
way of exemplary damages.
After a careful study of the facts obtaining in the case, the vital
issues to be resolved are: (1) Does the stipulation between
Villarama and Pantranco, as contained in the deed of sale, that
the former "SHALL NOT FOR A PERIOD OF 10 YEARS FROM
THE DATE OF THIS SALE, APPLY FOR ANY TPU SERVICE
IDENTICAL OR COMPETING WITH THE BUYER," apply to new
lines only or does it include existing lines?; (2) Assuming that said
stipulation covers all kinds of lines, is such stipulation valid and
enforceable?; (3) In the affirmative, that said stipulation is valid,
did it bind the Corporation?
For convenience, We propose to discuss the foregoing issues by
starting with the last proposition.
The evidence has disclosed that Villarama, albeit was not an
incorporator or stockholder of the Corporation, alleging that he did
not become such, because he did not have sufficient funds to
invest, his wife, however, was an incorporator with the least
subscribed number of shares, and was elected treasurer of the
Corporation. The finances of the Corporation which, under all
concepts in the law, are supposed to be under the control and
administration of the treasurer keeping them as trust fund for the
Corporation, were, nonetheless, manipulated and disbursed as if
they were the private funds of Villarama, in such a way and extent
that Villarama appeared to be the actual owner-treasurer of the
business without regard to the rights of the stockholders. The
following testimony of Villarama,4together with the other evidence
on record, attests to that effect:
 Q.       Doctor, I want to go back again to the incorporation
of the Villa Rey Transit, Inc. You heard the testimony
presented here by the bank regarding the initial opening
deposit of ONE HUNDRED FIVE THOUSAND PESOS, of
which amount Eighty-Five Thousand Pesos was a check
drawn by yourself personally. In the direct examination
you told the Court that the reason you drew a check for
Eighty-Five Thousand Pesos was because you and your
wife, or your wife, had spent the money of the
stockholders given to her for incorporation. Will you
please tell the Honorable Court if you knew at the time
your wife was spending the money to pay debts, you
personally knew she was spending the money of the
incorporators?
A.       You know my money and my wife's money are one.
We never talk about those things.
Q.       Doctor, your answer then is that since your money
and your wife's money are one money and you did not
know when your wife was paying debts with the
incorporator's money?
A.       Because sometimes she uses my money, and
sometimes the money given to her she gives to me and I
deposit the money.
Q.       Actually, aside from your wife, you were also the
custodian of some of the incorporators here, in the
beginning?
A.       Not necessarily, they give to my wife and when my
wife hands to me I did not know it belonged to the
incorporators.
42
Q.       It supposes then your wife gives you some of the
money received by her in her capacity as treasurer of the
corporation?
A.       Maybe.
Q.       What did you do with the money, deposit in a
regular account?
A.       Deposit in my account.
Q.       Of all the money given to your wife, she did not
receive any check?
A.       I do not remember.
Q.       Is it usual for you, Doctor, to be given Fifty
Thousand Pesos without even asking what is this?
xxx           xxx           xxx
JUDGE:    Reform the question.
Q.       The subscription of your brother-in-law, Mr. Reyes,
is Fifty-Two Thousand Pesos, did your wife give you Fifty-
two Thousand Pesos?
A.       I have testified before that sometimes my wife
gives me money and I do not know exactly for what.
The evidence further shows that the initial cash capitalization of
the corporation of P105,000.00 was mostly financed by Villarama.
Of the P105,000.00 deposited in the First National City Bank of
New York, representing the initial paid-up capital of the
Corporation, P85,000.00 was covered by Villarama's personal
check. The deposit slip for the said amount of P105,000.00 was
admitted in evidence as Exh. 23, which shows on its face that
P20,000.00 was paid in cash and P85,000.00 thereof was
covered by Check No. F-50271 of the First National City Bank of
New York. The testimonies of Alfonso Sancho5 and Joaquin
Amansec,6 both employees of said bank, have proved that the
drawer of the check was Jose Villarama himself.
Another witness, Celso Rivera, accountant of the Corporation,
testified that while in the books of the corporation there appears
an entry that the treasurer received P95,000.00 as second
installment of the paid-in subscriptions, and, subsequently, also
P100,000.00 as the first installment of the offer for second
subscriptions worth P200,000.00 from the original subscribers,
yet Villarama directed him (Rivera) to make vouchers liquidating
the sums.7 Thus, it was made to appear that the P95,000.00 was
delivered to Villarama in payment for equipment purchased from
him, and the P100,000.00 was loaned as advances to the
stockholders. The said accountant, however, testified that he was
not aware of any amount of money that had actually passed
hands among the parties involved,8 and actually the only money
of the corporation was the P105,000.00 covered by the deposit
slip Exh. 23, of which as mentioned above, P85,000.00 was paid
by Villarama's personal check.
Further, the evidence shows that when the Corporation was in its
initial months of operation, Villarama purchased and paid with his
personal checks Ford trucks for the Corporation. Exhibits 20 and
21 disclose that the said purchases were paid by Philippine Bank
of Commerce Checks Nos. 992618-B and 993621-B,
respectively. These checks have been sufficiently established by
Fausto Abad, Assistant Accountant of Manila Trading & Supply
Co., from which the trucks were purchased9 and Aristedes
Solano, an employee of the Philippine Bank of Commerce,10as
having been drawn by Villarama.
Exhibits 6 to 19 and Exh. 22, which are photostatic copies of
ledger entries and vouchers showing that Villarama had co-
mingled his personal funds and transactions with those made in
43
the name of the Corporation, are very illuminating evidence.
Villarama has assailed the admissibility of these exhibits,
contending that no evidentiary value whatsoever should be given
to them since "they were merely photostatic copies of the
originals, the best evidence being the originals themselves."
According to him, at the time Pantranco offered the said exhibits,
it was the most likely possessor of the originals thereof because
they were stolen from the files of the Corporation and only
Pantranco was able to produce the alleged photostat copies
thereof.
Section 5 of Rule 130 of the Rules of Court provides for the
requisites for the admissibility of secondary evidence when the
original is in the custody of the adverse party, thus: (1) opponent's
possession of the original; (2) reasonable notice to opponent to
produce the original; (3) satisfactory proof of its existence; and (4)
failure or refusal of opponent to produce the original in
court.11 Villarama has practically admitted the second and fourth
requisites.12As to the third, he admitted their previous existence in
the files of the Corporation and also that he had seen some of
them.13 Regarding the first element, Villarama's theory is that
since even at the time of the issuance of the subpoena duces
tecum, the originals were already missing, therefore, the
Corporation was no longer in possession of the same. However, it
is not necessary for a party seeking to introduce secondary
evidence to show that the original is in the actual possession of
his adversary. It is enough that the circumstances are such as to
indicate that the writing is in his possession or under his control.
Neither is it required that the party entitled to the custody of the
instrument should, on being notified to produce it, admit having it
in his possession.14 Hence, secondary evidence is admissible
where he denies having it in his possession. The party calling for
such evidence may introduce a copy thereof as in the case of
loss. For, among the exceptions to the best evidence rule is
"when the original has been lost, destroyed, or cannot be
produced in court."15 The originals of the vouchers in question
must be deemed to have been lost, as even the Corporation
admits such loss. Viewed upon this light, there can be no doubt
as to the admissibility in evidence of Exhibits 6 to 19 and 22.
Taking account of the foregoing evidence, together with Celso
Rivera's testimony,16 it would appear that: Villarama supplied the
organization expenses and the assets of the Corporation, such as
trucks and equipment;17 there was no actual payment by the
original subscribers of the amounts of P95,000.00 and
P100,000.00 as appearing in the books;18 Villarama made use of
the money of the Corporation and deposited them to his private
accounts;19 and the Corporation paid his personal accounts.20
Villarama himself admitted that he mingled the corporate funds
with his own money.21 He also admitted that gasoline purchases
of the Corporation were made in his name22 because "he had
existing account with Stanvac which was properly secured and he
wanted the Corporation to benefit from the rebates that he
received."23
The foregoing circumstances are strong persuasive evidence
showing that Villarama has been too much involved in the affairs
of the Corporation to altogether negative the claim that he was
only a part-time general manager. They show beyond doubt that
the Corporation is his alter ego.
It is significant that not a single one of the acts enumerated above
as proof of Villarama's oneness with the Corporation has been
denied by him. On the contrary, he has admitted them with
offered excuses.
Villarama has admitted, for instance, having paid P85,000.00 of
the initial capital of the Corporation with the lame excuse that "his
wife had requested him to reimburse the amount entrusted to her
by the incorporators and which she had used to pay the
obligations of Dr. Villarama (her husband) incurred while he was
still the owner of Villa Rey Transit, a single proprietorship." But
with his admission that he had received P350,000.00 from
44
Pantranco for the sale of the two certificates and one unit,24 it
becomes difficult to accept Villarama's explanation that he and his
wife, after consultation,25 spent the money of their relatives (the
stockholders) when they were supposed to have their own
money. Even if Pantranco paid the P350,000.00 in check to him,
as claimed, it could have been easy for Villarama to have
deposited said check in his account and issued his own check to
pay his obligations. And there is no evidence adduced that the
said amount of P350,000.00 was all spent or was insufficient to
settle his prior obligations in his business, and in the light of the
stipulation in the deed of sale between Villarama and Pantranco
that P50,000.00 of the selling price was earmarked for the
payments of accounts due to his creditors, the excuse appears
unbelievable.
On his having paid for purchases by the Corporation of trucks
from the Manila Trading & Supply Co. with his personal checks,
his reason was that he was only sharing with the Corporation his
credit with some companies. And his main reason for mingling his
funds with that of the Corporation and for the latter's paying his
private bills is that it would be more convenient that he kept the
money to be used in paying the registration fees on time, and
since he had loaned money to the Corporation, this would be set
off by the latter's paying his bills. Villarama admitted, however,
that the corporate funds in his possession were not only for
registration fees but for other important obligations which were
not specified.26
Indeed, while Villarama was not the Treasurer of the Corporation
but was, allegedly, only a part-time manager,27 he admitted not
only having held the corporate money but that he advanced and
lent funds for the Corporation, and yet there was no Board
Resolution allowing it.28
Villarama's explanation on the matter of his involvement with the
corporate affairs of the Corporation only renders more credible
Pantranco's claim that his control over the corporation, especially
in the management and disposition of its funds, was so extensive
and intimate that it is impossible to segregate and identify which
money belonged to whom. The interference of Villarama in the
complex affairs of the corporation, and particularly its finances,
are much too inconsistent with the ends and purposes of the
Corporation law, which, precisely, seeks to separate personal
responsibilities from corporate undertakings. It is the very
essence of incorporation that the acts and conduct of the
corporation be carried out in its own corporate name because it
has its own personality.
The doctrine that a corporation is a legal entity distinct and
separate from the members and stockholders who compose it is
recognized and respected in all cases which are within reason
and the law.29 When the fiction is urged as a means of
perpetrating a fraud or an illegal act or as a vehicle for the
evasion of an existing obligation, the circumvention of statutes,
the achievement or perfection of a monopoly or generally the
perpetration of knavery or crime,30 the veil with which the law
covers and isolates the corporation from the members or
stockholders who compose it will be lifted to allow for its
consideration merely as an aggregation of individuals.
Upon the foregoing considerations, We are of the opinion, and so
hold, that the preponderance of evidence have shown that the
Villa Rey Transit, Inc. is an alter ego of Jose M. Villarama, and
that the restrictive clause in the contract entered into by the latter
and Pantranco is also enforceable and binding against the said
Corporation. For the rule is that a seller or promisor may not
make use of a corporate entity as a means of evading the
obligation of his covenant.31 Where the Corporation is
substantially the alter ego of the covenantor to the restrictive
agreement, it can be enjoined from competing with the
covenantee.32
The Corporation contends that even on the supposition that Villa
Rey Transit, Inc. and Villarama are one and the same, the
restrictive clause in the contract between Villarama and
Pantranco does not include the purchase of existing lines but it
45
only applies to application for the new lines. The clause in dispute
reads thus:
(4) The SELLER shall not, for a period of ten (10) years
from the date of this sale apply for any TPU service
identical or competing with the BUYER. (Emphasis
supplied)
As We read the disputed clause, it is evident from the context
thereof that the intention of the parties was to eliminate the seller
as a competitor of the buyer for ten years along the lines of
operation covered by the certificates of public convenience
subject of their transaction. The word "apply" as broadly used has
for frame of reference, a service by the seller on lines or routes
that would compete with the buyer along the routes acquired by
the latter. In this jurisdiction, prior authorization is needed before
anyone can operate a TPU service,33whether the service consists
in a new line or an old one acquired from a previous operator.
The clear intention of the parties was to prevent the seller from
conducting any competitive line for 10 years since, anyway, he
has bound himself not to apply for authorization to operate along
such lines for the duration of such period.34
If the prohibition is to be applied only to the acquisition of new
certificates of public convenience thru an application with the
Public Service Commission, this would, in effect, allow the seller
just the same to compete with the buyer as long as his authority
to operate is only acquired thru transfer or sale from a previous
operator, thus defeating the intention of the parties. For what
would prevent the seller, under the circumstances, from having a
representative or dummy apply in the latter's name and then later
on transferring the same by sale to the seller? Since stipulations
in a contract is the law between the contracting parties,
Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith. (Art. 19,
New Civil Code.)
We are not impressed of Villarama's contention that the re-
wording of the two previous drafts of the contract of sale between
Villarama and Pantranco is significant in that as it now appears,
the parties intended to effect the least restriction. We are
persuaded, after an examination of the supposed drafts, that the
scope of the final stipulation, while not as long and prolix as those
in the drafts, is just as broad and comprehensive. At most, it can
be said that the re-wording was done merely for brevity and
simplicity.
The evident intention behind the restriction was to eliminate the
sellers as a competitor, and this must be, considering such
factors as the good will35 that the seller had already gained from
the riding public and his adeptness and proficiency in the trade.
On this matter, Corbin, an authority on Contracts has this to say.36
When one buys the business of another as a going
concern, he usually wishes to keep it going; he wishes to
get the location, the building, the stock in trade, and the
customers. He wishes to step into the seller's shoes and
to enjoy the same business relations with other men. He
is willing to pay much more if he can get the "good will" of
the business, meaning by this the good will of the
customers, that they may continue to tread the old
footpath to his door and maintain with him the business
relations enjoyed by the seller.
... In order to be well assured of this, he obtains and pays
for the seller's promise not to reopen business in
competition with the business sold.
As to whether or not such a stipulation in restraint of trade is
valid, our jurisprudence on the matter37says:
The law concerning contracts which tend to restrain
business or trade has gone through a long series of
changes from time to time with the changing condition of
46
trade and commerce. With trifling exceptions, said
changes have been a continuous development of a
general rule. The early cases show plainly a disposition to
avoid and annul all contract which prohibited or restrained
any one from using a lawful trade "at any time or at any
place," as being against the benefit of the state. Later,
however, the rule became well established that if the
restraint was limited to "a certain time" and within "a
certain place," such contracts were valid and not "against
the benefit of the state." Later cases, and we think the
rule is now well established, have held that a contract in
restraint of trade is valid providing there is a limitation
upon either time or place. A contract, however, which
restrains a man from entering into business or trade
without either a limitation as to time or place, will be held
invalid.
The public welfare of course must always be considered
and if it be not involved and the restraint upon one party is
not greater than protection to the other requires, contracts
like the one we are discussing will be sustained. The
general tendency, we believe, of modern authority, is to
make the test whether the restraint is reasonably
necessary for the protection of the contracting parties. If
the contract is reasonably necessary to protect the
interest of the parties, it will be upheld. (Emphasis
supplied.)
Analyzing the characteristics of the questioned stipulation, We
find that although it is in the nature of an agreement suppressing
competition, it is, however, merely ancillary or incidental to the
main agreement which is that of sale. The suppression or
restraint is only partial or limited: first, in scope, it refers only to
application for TPU by the seller in competition with the lines sold
to the buyer; second, in duration, it is only for ten (10) years; and
third, with respect to situs or territory, the restraint is only along
the lines covered by the certificates sold. In view of these
limitations, coupled with the consideration of P350,000.00 for
just two certificates of public convenience, and considering,
furthermore, that the disputed stipulation is only incidental to a
main agreement, the same is reasonable and it is not harmful nor
obnoxious to public service.38 It does not appear that the ultimate
result of the clause or stipulation would be to leave solely to
Pantranco the right to operate along the lines in question, thereby
establishing monopoly or predominance approximating thereto.
We believe the main purpose of the restraint was to protect for a
limited time the business of the buyer.
Indeed, the evils of monopoly are farfetched here. There can be
no danger of price controls or deterioration of the service because
of the close supervision of the Public Service Commission.39 This
Court had stated long ago,40that "when one devotes his property
to a use in which the public has an interest, he virtually grants to
the public an interest in that use and submits it to such public use
under reasonable rules and regulations to be fixed by the Public
Utility Commission."
Regarding that aspect of the clause that it is merely ancillary or
incidental to a lawful agreement, the underlying reason sustaining
its validity is well explained in 36 Am. Jur. 537-539, to wit:
... Numerous authorities hold that a covenant which is
incidental to the sale and transfer of a trade or business,
and which purports to bind the seller not to engage in the
same business in competition with the purchaser, is lawful
and enforceable. While such covenants are designed to
prevent competition on the part of the seller, it is ordinarily
neither their purpose nor effect to stifle competition
generally in the locality, nor to prevent it at all in a way or
to an extent injurious to the public. The business in the
hands of the purchaser is carried on just as it was in the
hands of the seller; the former merely takes the place of
the latter; the commodities of the trade are as open to the
public as they were before; the same competition exists
as existed before; there is the same employment
furnished to others after as before; the profits of the
47
business go as they did before to swell the sum of public
wealth; the public has the same opportunities of
purchasing, if it is a mercantile business; and production
is not lessened if it is a manufacturing plant.
The reliance by the lower court on tile case of Red Line
Transportation Co. v. Bachrach41 and finding that the stipulation is
illegal and void seems misplaced. In the said Red Line case, the
agreement therein sought to be enforced was virtually a division
of territory between two operators, each company imposing upon
itself an obligation not to operate in any territory covered by the
routes of the other. Restraints of this type, among common
carriers have always been covered by the general rule
invalidating agreements in restraint of trade. 42
Neither are the other cases relied upon by the plaintiff-appellee
applicable to the instant case. In Pampanga Bus Co., Inc. v.
Enriquez,43the undertaking of the applicant therein not to apply for
the lifting of restrictions imposed on his certificates of public
convenience was not an ancillary or incidental agreement. The
restraint was the principal objective. On the other hand, in Red
Line Transportation Co., Inc. v. Gonzaga,44 the restraint there in
question not to ask for extension of the line, or trips, or increase
of equipment — was not an agreement between the parties but a
condition imposed in the certificate of public convenience itself.
Upon the foregoing considerations, Our conclusion is that the
stipulation prohibiting Villarama for a period of 10 years to "apply"
for TPU service along the lines covered by the certificates of
public convenience sold by him to Pantranco is valid and
reasonable. Having arrived at this conclusion, and considering
that the preponderance of the evidence have shown that Villa
Rey Transit, Inc. is itself the alter ego of Villarama, We hold, as
prayed for in Pantranco's third party complaint, that the said
Corporation should, until the expiration of the 1-year period
abovementioned, be enjoined from operating the line subject of
the prohibition.
To avoid any misunderstanding, it is here to be emphasized that
the 10-year prohibition upon Villarama is not against his
application for, or purchase of, certificates of public convenience,
but merely the operation of TPU along the lines covered by the
certificates sold by him to Pantranco. Consequently, the sale
between Fernando and the Corporation is valid, such that the
rightful ownership of the disputed certificates still belongs to the
plaintiff being the prior purchaser in good faith and for value
thereof. In view of the ancient rule of caveat emptor prevailing in
this jurisdiction, what was acquired by Ferrer in the sheriff's sale
was only the right which Fernando, judgment debtor, had in the
certificates of public convenience on the day of the sale.45
Accordingly, by the "Notice of Levy Upon Personalty" the
Commissioner of Public Service was notified that "by virtue of an
Order of Execution issued by the Court of First Instance of
Pangasinan, the rights, interests, or participation which the
defendant, VALENTIN A. FERNANDO — in the above entitled
case may have in the following realty/personalty is attached or
levied upon, to wit: The rights, interests and participation on the
Certificates of Public Convenience issued to Valentin A.
Fernando, in Cases Nos. 59494, etc. ... Lines — Manila to
Lingayen, Dagupan, etc. vice versa." Such notice of levy only
shows that Ferrer, the vendee at auction of said certificates,
merely stepped into the shoes of the judgment debtor. Of the
same principle is the provision of Article 1544 of the Civil Code,
that "If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should
be movable property."
There is no merit in Pantranco and Ferrer's theory that the sale of
the certificates of public convenience in question, between the
Corporation and Fernando, was not consummated, it being only a
conditional sale subject to the suspensive condition of its
approval by the Public Service Commission. While section 20(g)
of the Public Service Act provides that "subject to established
limitation and exceptions and saving provisions to the contrary, it
48
shall be unlawful for any public service or for the owner, lessee or
operator thereof, without the approval and authorization of the
Commission previously had ... to sell, alienate, mortgage,
encumber or lease its property, franchise, certificates, privileges,
or rights or any part thereof, ...," the same section also provides:
... Provided, however, That nothing herein contained shall
be construed to prevent the transaction from being
negotiated or completed before its approval or to prevent
the sale, alienation, or lease by any public service of any
of its property in the ordinary course of its business.
It is clear, therefore, that the requisite approval of the PSC is not
a condition precedent for the validity and consummation of the
sale.
Anent the question of damages allegedly suffered by the parties,
each of the appellants has its or his own version to allege.
Villa Rey Transit, Inc. claims that by virtue of the "tortious acts" of
defendants (Pantranco and Ferrer) in acquiring the certificates of
public convenience in question, despite constructive and actual
knowledge on their part of a prior sale executed by Fernando in
favor of the said corporation, which necessitated the latter to file
the action to annul the sheriff's sale to Ferrer and the subsequent
transfer to Pantranco, it is entitled to collect actual and
compensatory damages, and attorney's fees in the amount of
P25,000.00. The evidence on record, however, does not clearly
show that said defendants acted in bad faith in their acquisition of
the certificates in question. They believed that because the bill of
sale has yet to be approved by the Public Service Commission,
the transaction was not a consummated sale, and, therefore, the
title to or ownership of the certificates was still with the seller. The
award by the lower court of attorney's fees of P5,000.00 in favor
of Villa Rey Transit, Inc. is, therefore, without basis and should be
set aside.
Eusebio Ferrer's charge that by reason of the filing of the action it awards the sum of P5,000.00 as attorney's fees in favor of Villa
to annul the sheriff's sale, he had suffered and should be Rey Transit, Inc.;
awarded moral, exemplary damages and attorney's fees, cannot
be entertained, in view of the conclusion herein reached that the 3. The case is remanded to the trial court for the reception of
sale by Fernando to the Corporation was valid. evidence in consonance with the above findings as regards the
amount of damages suffered by Pantranco; and
Pantranco, on the other hand, justifies its claim for damages with
the allegation that when it purchased ViIlarama's business for 4. On equitable considerations, without costs. So ordered.
P350,000.00, it intended to build up the traffic along the lines
covered by the certificates but it was rot afforded an opportunity
to do so since barely three months had elapsed when the
contract was violated by Villarama operating along the same lines
in the name of Villa Rey Transit, Inc. It is further claimed by
Pantranco that the underhanded manner in which Villarama
violated the contract is pertinent in establishing punitive or moral
damages. Its contention as to the proper measure of damages is
that it should be the purchase price of P350,000.00 that it paid to
Villarama. While We are fully in accord with Pantranco's claim of
entitlement to damages it suffered as a result of Villarama's
breach of his contract with it, the record does not sufficiently
supply the necessary evidentiary materials upon which to base
the award and there is need for further proceedings in the lower
court to ascertain the proper amount.

PREMISES CONSIDERED, the judgment appealed from is

hereby modified as follows:

1. The sale of the two certificates of public convenience in

question by Valentin Fernando to Villa Rey Transit, Inc. is
declared preferred over that made by the Sheriff at public auction
of the aforesaid certificate of public convenience in favor of
Eusebio Ferrer;

2. Reversed, insofar as it dismisses the third-party complaint filed

by Pangasinan Transportation Co. against Jose M. Villarama,
holding that Villa Rey Transit, Inc. is an entity distinct and
separate from the personality of Jose M. Villarama, and insofar as

49
 1. TRIAL; RECEPTION OF EVIDENCE; RULINGS BY
COURT AS TO FORM OF QUESTIONS. — While trial courts
should see to it that they are not imposed on by the
introduction of incompetent testimony or by other
evasions of the well established rules of evidence, they
should not be so strict as to the mere form of a questions
as will result in injustice when the evidence which is
intended to be brought out by the questions, and which
in all probability will be brought out by it, is competent
and material and is absolutely necessary to the
protection of the party’s rights. 

2. ID.; ID.; ID. — While trial courts should, of course, be

at all times strictly impartial as between litigants, they
may and should go so far as to indicate and suggests the
form of questions to and the method of examination of a
witness where it appears that examining counsel,
through inexperience or misunderstanding, is unable to
extract evidence which is competent and essential to his
client’s case. 

3. EVIDENCE; PRELIMINARIES TO ADMISSION OF

SECONDARY EVIDENCE. — Method of laying the
foundation for the introduction of secondary evidence of
the contents of a lost written instrument discussed. 

10. [G.R. No. 10824. December 24, 1915. ]

DECISION
E. MICHAEL & CO., Plaintiff-Appellant, v. ADRIANO
ENRIQUEZ, Defendant-Appellee. 
MORELAND, J. :
Sepulveda, Pelaez & Espina for Appellant. 

No appearance for Appellee.  This is an appeal from a judgment of the Court of First

Instance of Cebu dismissing the action after trial on the
SYLLABUS ground that the plaintiff did not prove facts sufficient to

50
constitute a cause of action.  said with respect to the attempts to establish the loss of
We are of the opinion that the judgment must be
reversed and a new trial ordered.  admission of evidence tending to establish the execution
The action is based on a sale with a right to repurchase
made by Adriano Enriquez in favor of E. Michael and E.
Michael & Co., socieded en comandita, of which appellant
claims to be the successor, by reason of an instrument,
duly executed and delivered by said reason of an
instrument, duly executed and delivered by said
companies to appellant, transferring property, business
and assets of every kind, including the land which is the
subject of this litigation. It is alleged in the complaint
that the time to repurchase having expired, the title to
the property became absolute in appellant and that it is
accordingly the owner of the land described in said
instrument. On the trial appellant sought to prove the
execution and delivery of the conveyance transferring to
it the land described in the sale with right to repurchase.
The trial court prevented appellant from proving the fact.
Appellant also attempted to prove the fact that the
instrument so executed and delivered was lost, it being
his purpose to lay the basis for the introduction of
secondary evidence as to its contents. the trial court also
prevented appellant from proving that fact.  which case, before its contents may be proved by other
While the efforts of appellant’s counsel to prove the
execution and delivery of the documents were at times
rather informal and in artificial and objections to such
questions were properly sustained, at others the
questions put for the purpose of proving those facts were
well framed and answers should have been allowed to
them; but, even in such cases, the trial court also
sustained objections to the questions and the evidence
sought to be adduced was excluded. The same may be
51
the document. Exceptions were taken by plaintiff’s
counsel to all adverse rulings of the court respecting the
and delivery and the subsequent loss of the document in
questions, thus laying the proper foundation for bringing
up the rulings of the court on those matters. 
Trial courts do well in refusing at all times to permit the
introduction of incompetent evidence and particularly
secondary evidence of the contents of written
instruments unless the facts required by the Code of Civil
Procedure as the conditions precedent for such evidence
are clearly shown to exist. Section 321 of the Code
provides: "An original writing must be produced and
proved, except as otherwise provided in this Act. If it has
been lost, proof of the loss must first be made before
evidence can be given of its contents. Upon such proof
being made, together with proof of the due execution of
the writing, its contents may be proved by a copy or a
recital of its contents in some authentic document, or by
the recollection of a witness."
cralaw virtua1aw library
As will be seen from this section, the writing itself must
be produced unless it has been lost or destroyed, in
evidence, it must be shown by the person offering the
secondary evidence (1) that the document was duly
executed and delivered , where delivery is necessary,
and (2) that it has been lost or destroyed. The execution
and delivery of the document may be established by the
person or persons who executed it, by the person before
whom its execution was acknowledge, or by any person
who was present and saw it executed and delivered or
who, after its execution and delivery, saw it and
recognized the signatures; or by a person to whom the
parties to the instrument had previously confessed the
execution thereof. 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 anyone who has 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 make any
other investigation which is sufficient to satisfy the court
that the instrument is indeed lost. If it appears, on an
attempt to prove the loss, that the document is in fact in
existence, then the proof of the loss or destruction fails
and secondary evidence is inadmissible unless section
322 of the Code of Civil Procedure should be applicable.
After proper proof of the due execution and delivery of
the instrument and its loss or destruction, oral evidence
may be given of its contents by any person who signed
the document, or who read it, or who heard it read
knowing, or it being proved from the other sources, that
the document so read was the one in question. Such
evidence may also be given by any person who was
present when the contents of the document were talked
over between the parties thereto to such an extent as to
give him reasonably full information as to its contents; or
the contents may be proved by any person to whom the
parties to the instrument have confessed or stated the
contents thereof; or by a copy thereof; or by a recital of
its contents in some authentic document.  instruments as one of transfer, while objectionable, was
Objections were sustained by the trial court to several
questions put by appellant’s counsel relative to the due
executions and delivery of the instrument of transfer
between the partnership of E. Michael & Co., sociedad en
comandita, and appellant, on the ground that counsel, in
an attempt to identify the document to which his
52
question referred, described or characterized it as an
instrument of transfer or cession. Counsel, if he had
desired to identify the instrument to which the question
referred, might have done better, perhaps, if he had
asked the witness if he knew of the execution of an
instrument between appellant and its predecessor in
interest relating to the lands described in the complaint
or to the property and business of E. Michael & Co.,
sociedad en comandita, instead of asking him if he knew
of the execution of a document between appellant and
his predecessors in interest transferring the lands in
questions, or the property and business of E. Michael &
Co., sociedad en comandita, to Appellant. Having
obtained an affirmative answer to the questions indicated
counsel could then have shown how the witness came to
know of the execution or existence of the document, and,
if such circumstances disclosed that the witness was
sufficiently acquainted with the facts, he would have
been allowed to testify to its execution and delivery.
After this had been done the document might then have
been presented for identification and, when identified,
offered in evidence. If its contents showed that it
referred to the lands described in the complaint, its
admissibility would have been instantly evident. 
The mere fact that counsel for appellant, in putting his
question to the witness, characterized or described the
not sufficient to cut him off altogether from proving the
execution and delivery of the document if other
requisites were present. While it is always best to avoid
characterizations of that kind, its harm is minimized
where the case is tried before a court instead of a jury,
the court well knowing that it cannot accept the
characterization as evidence but must go to the
document itself or the evidence of its contents to CALLEJO, SR., J.:
determine its nature and legal effect. Trial courts should
not be so strict with reference to matters of the character NEUGENE Marketing, Inc. (NMI) was incorporated on January
under discussions as to cause a miscarriage of justice; 27, 1978 with funds provided by the Uy Family. It had an
but, on the other hand, they should see to it that they authorized capital stock of ₱3 million divided into 30,000 shares
are not imposed on by the introduction of fabricated with a par value of ₱100 per share. The original incorporators,
testimony and that injustice shall not result from an with their corresponding number of shares and the amounts
evasion of the rules of evidence by designing persons.  thereof, are as follows:

We are of the opinion on the whole record that proper Johnson Lee 600 ₱ 60,000.00
questions, tending to the production of very material and
competent evidence, were put by plaintiff’s counsel, Lok Chun Suen 1,200 120,000.00
objections to which were sustained by the trial court; and
that the error thus committed was not cured by Charles O. Sy 1,800 180,000.00
subsequent questions and answers or by the introduction Eugenio Flores, Jr. 2,100 210,000.00
of the same evidence in different manner or form. 
Arsenio Yang, Jr. 300 30,000.00
The judgment must be reversed and a new trial ordered,
without costs in this instance. So ordered. 
TOTAL 6,000 ₱600,000.00
===== ===========

There were two stock dividend declarations, one on June

7, 1980 in the amount of ₱60,000.00 and another on May
2, 1981 for ₱40,000.00. On May 15, 1986 Eugenio Flores,
Jr. assigned/divested himself of his shares in favor of
Sonny Moreno, 1,050 shares; Arsenio Yang, Jr., 700
shares and Charles O. Sy, 700 shares.1
12. G.R. No. 159288             October 19, 2004
On June 11, 1987, the NMI sold and delivered to the Victorias
JOHNSON LEE, petitioner,  Milling Company, Inc. (VMCI), in Victorias, Negros Occidental,
vs. 77,500 pieces of empty white bags for the price of ₱565,750.00.
PEOPLE OF THE PHILIPPINES and NEUGENE MARKETING, NMI issued Charge Invoice No. 08092dated June 11, 1987 to
INC., respondents. VMCI covering said sale. On June 18, 1987, VMCI purchased
100,000 pieces of empty white bags from NMI for ₱730,000.00
DECISION for which NMI issued Charge Invoice No. 0810.3 On June 25,

53
1987, VMCI again purchased 28,000 pieces of empty white bags meeting was to be held on November 30, 1987 to consider the
from NMI for the price of ₱204,400.00 and the latter issued dissolution of the corporation. Again the stockholders who
Charge Invoice No. 08114 dated June 25, 1987. In payment of attended the October 24, 1987 meeting were present. Upon
said purchases from NMI, VMCI drew and issued two Bank of the motion duly seconded, the dissolution was approved. Per
Philippine Islands (BPI) Checks: Check No. 068706 dated August Resolution of the Board of Directors, the law firm of Reyes,
3, 1987 in the amount of ₱565,750.005 and Check No. 068993 Treyes & Fudolin Law Office was appointed as trustee to collect
dated August 19, 1987 in the amount of ₱934,400.00.6 Both all the receivables of the corporation.
checks were payable to the order of NMI. 
At the time of the approval of the dissolution of the corporation on
On October 13, 1987, stockholders owning two-thirds (2/3) of the November 30, 1987, the shares of each stockholder were as
subscribed capital stock of NMI voted to call a stockholders’ follows:
meeting. One of the items in the agenda was the dissolution of
the corporation.
Total as of Nov.
Name of Stockholders
30.
Pursuant thereto, a special stockholders’ meeting was held on
October 24, 1987 in Bacolod City. The following stockholders,
Johnson Lee, 600 (subscription);
who were also directors, were present and voted to dissolve the
60 
corporation:
(June 7, 1980 stock dividend); 40 
(May 2, 1981 stock dividend)
Name of Stockholders Number of Shares --------- 700 shares

Arsenio Yang, Jr. 1,050 <="" td="" Lok Chun Suen, 1,200
style="font- (subscription); 120 
Charles Sy 2,800 (June 7, 1980 stock dividend); 80 
size: 14px;
(May 2, 1981 stock dividend)
Lok Chun Suen 1,400 text- ---------- 1,400 shares
decoration:
none; color: Charles O. Sy, 1800 (subscription);
rgb(0, 0, 180
5,250 128); font-
(June 7, 1980 stock dividend); 120
Total
family: (May 2, 1981 stock dividend); 700
arial, (acquisition from Eugenio Flores
---------- 2,800 shares
verdana;">
Arsenio Yang, Jr., 300 1,050 shares
Accordingly, notices were again sent to all stockholders of record, (subscription); 30 
all of whom properly acknowledged the said notices, that a (June 7, 1980 stock dividend); 20

54

(May 2, 1981 stock dividend); 700
(acquisition from Eugenio Flores)
--------
Sonny Moreno, 1,050 (acquisition
From Eugenio Flores)
-----------------------
During the requisite preliminary investigation, the petitioner and
Moreno submitted their counter-affidavits. The counter-affidavit of
the petitioner consisted of five pages.8 After the investigation, two
(2) Amended Informations were filed against the petitioner and
Moreno, with the Regional Trial Court (RTC) of Negros
Occidental. Except as to the particulars of the checks, the
accusatory portions of the two Informations are identical, thus:
1,050 shares

Total ---------------------------------- 7,000 shares
Pursuant to Section 11 of the Corporation Code, the Securities
and Exchange Commission approved the dissolution of the
corporation on March 1, 1988 subject to compliance of the
requirements, such as the sending of notices to stockholders and
publication thereof in a newspaper of general circulation, among
others.
On March 22, 1988, Johnson Lee, Sonny Moreno, Leoncio Tan
and Nicanor Martin filed a petition with the Securities and
Investigation Clearing Department (SICD) of the Commission
praying, among other things, for the annulment or nullification of
the Certification of Filing of Resolution of Voluntary Dissolution of
NMI for being contrary to law and its by-laws.
In the meantime, the trustee wrote the petitioner, Johnson Lee,
on March 8, 1988 requesting him to turn over to it the
₱1,500,150.00 he received in payment of the empty bags sold by
NMI to VCMI. However, he failed to do so.7
A verified complaint for three (3) counts of estafa was filed
against the petitioner and Sonny Moreno with the City
Prosecutor’s Office. Appended to the complaint were photocopies
of Charge Invoice Nos. 0809, 0810, and 0811, issued by NMI to
VMCI.
That sometime in the month of August 1987, in the City of
Bacolod, Philippines, and within the jurisdiction of this
Honorable Court, the herein accused, Johnson Lee, being
then the President and Sonny Moreno, the General
Manager of Neugene Marketing, Inc., with the duty and
responsibility to collect, turn over and deliver their
collections to the herein offended party, Neugene
Marketing, Inc., a corporation organized and existing by
and under the laws of the Philippines, represented herein
by its Trustees, Roger Reyes, Ernesto Treyes, and
Eutiquio Fudolin, the said accused conspiring,
confederating, and acting in concert far from complying
with the aforementioned obligation having collected the
amount of ₱565,750.00 covered by BPI Check No.
068766 (sic) dated August 3, 1987 as payment of
Victorias Milling Company, a customer of the herein
offended party, with intent of gain, and with unfaithfulness
or abuse of confidence failed and refused to deliver the
aforementioned amount to the herein offended party, up
to the present, in spite of proper demands, but instead,
did, then and there willfully, unlawfully and feloniously
convert[ed] and/or misappropriated the same to their
personal use and benefit to the damage and prejudice of
the herein offended party in the aforementioned amount
of FIVE HUNDRED SIXTY-FIVE THOUSAND SEVEN
HUNDRED FIFTY (₱565,750.00) PESOS, Philippine
Currency.
Act contrary to law.9

55
The cases were docketed as Criminal Cases Nos. 10010 and Thereafter, the prosecution formally offered in evidence the
10011.  counter-affidavit of the petitioner during the preliminary
investigation, as well as the charge invoices and checks, viz.
During the trial, the original copies of Charge Invoice Nos. 0809,
0810 and 0811, and of BPI Check Nos. 068766 and 068993 were
"G" NMI Charge Invoice No. 0809 dated To prove that Victorias Mill
not in the custody of the prosecution.
June 11, 1987 ordered 77,500 pieces of e
on June 11, 1987 and that
To prove the loss, destruction or non-availability of the original delivered to VMC.
copies of the charge invoices and checks, as well as the
authenticity and due execution thereof, the prosecution presented "H" NMI Charge Invoice No. 0810 dated To prove that VMC ordered
Ban Hua Flores, who testified that she saw the two checks in the June 18, 1987 empty bags from NMI on J
office of the petitioner at the Singson Building, Plaza Moraga, Sta. that these bags were delive
Cruz, Manila. Sometime in 1987, she went to the office of the
VMCI and inquired if it still had copies of the two checks and the "I" NMI Charge Invoice No. 0811 dated To prove that VMC ordered
clerk thereat informed her that it would be difficult to locate the June25, 1987 empty bags from NMI on J
checks as they were stored in the bodega, where many other that these bags were delive
checks were kept.10 Flores also testified that the signatures at the
dorsal portion of the checks were those of the petitioner, the "J" Demand letter dated March 8, 1988 To prove that in 1988, NMI
President of NMI, with whom she had been working, and that he signed by Atty. Roger Z. Reyes upon the accused for the d
indorsed and deposited the same on September 4, 1987 with the of ₱1,500,150.00 represen
Solidbank, instead of the BPI Plaza Cervantes branch in Manila, for the delivery of the empt
the official depository bank of NMI. According to Flores, she was Exhibits "G," "H" and "I."
able to secure microfilm copies of the checks from Solidbank, and
was sure that the copies of the checks and invoices were faithful "J-1" Signature appearing above the To prove the genuineness,
reproductions of the original copies thereof.11 typewritten name "Roger Z. Reyes" execution of Exhibit "J."
duly identified by the prosecution
Testifying for the prosecution in obedience to a subpoena issued witness, Mrs. Ban Hua Flores as the
by the court, Merlita Bayaban, Manager for Corporate Affairs of signature of Atty. Roger Z. Reyes
VMCI, declared that the records section of VMCI, which had
custody of all checks and other corporate records, was near her "K" Bank of the Philippine Village To prove that VMC made a
office. She testified that the checks, including their other records, Extension Check No. 068706 dated Islands (BPI) Legaspi NMI,
were lost during the flood in 1985.12 She also testified on the August3, 1987 ₱565,750.00 ₱565,750, as payment to N
Certification13 issued by Carolina Diaz, the Comptroller of VMCI, the empty bags mentioned
confirming the loss of the two checks. She, however, admitted and in the amount of "I."
that she did not see the original copies of the checks14 and that
she was not a signatory thereto.15 "K-1" Signature found on the dorsal side To prove that the accused
of Exhibit "K" which Mrs. Flores was in possession of Exhib

56
 identified as the signature of indorsed and deposited the same. "O" execution and authenticity of typewritten which both of t
accused Johnson Lee. Exhibit "O", name "Johnson Lee" admitted.

"K-2" Rubberstamp showing the name of To prove that Exhibit "K" was "O-2"
deposited
Paragraph
by 6 of Exhibit "O" found on Same purpose as in Exhib
"Solidbank" side of Exhibit "K" accused Lee in the Solidbank whichpage is not
2 thereof.17
appearing on the dorsal the official depository
bank of NMI, the official NMI depository bank
being the BPI Plaza The accused Branch.
Cervantes objected to the admission of the photocopies of the
checks and charge invoices on the ground that the best evidence
"L" BPI Legaspi Village Extension To prove that VMCwere made thea original copies thereof.
check payable to On April 12, 2002, the trial court
Check No. 068993 dated Aug. 19, issued an Order admitting
NMI in the amount of ₱934,400, as payment to the counter-affidavit of the petitioner,
1987 amount of ₱934,400.00 as well as the photocopies
NMI for the delivery of the empty bags in the of the checks and charge invoices, on
the ground that
mentioned in Exhibits "G, "H" and "I." the prosecution had adduced preponderant
evidence that the original copies of the said charges and checks
"L-1" Signature found on the dorsal side were lost,
To prove that the accused destroyed
Lee receivedorand non-available.18 The accused filed a
of Exhibit "L" which Mrs. Flores was in possessionmotion for "L"
of Exhibit reconsideration
and that he of the order, claiming that the
identified as the signature of indorsed and deposited the same. to prove the authenticity and due execution of
prosecution failed
accused Lee the offered documents, a prerequisite to the admission thereof as
secondary evidence. They also filed a Motion for Leave to File a
"L-2" Rubberstamp showing the name of Demurrer
To prove that Exhibit "L" wastodeposited
Evidence.byThe trial court denied both motions.
"Solidbank" appearing on dorsal accused Lee in the Solidbank which is not the
side of Exh. "L" In a petition
official depository bank of NMI,forthecertiorari under Rule 65 of the Rules of Court filed
official NMI
with the
depository bank being the BPI
Court of Appeals,
Plaza Cervantes the petitioner alleged that -
Branch.16
Respondent judge committed grave abuse of discretion
equivalent to lack or excess of jurisdiction, in admitting in
The prosecution also offered in evidence the counter-affidavit of
evidence the People’s documentary evidence, consisting
the petitioner during the preliminary investigation, as follows:
of mere unauthenticated photocopies, in flagrant violation
of the Best Evidence Rule (Sec. 3, 4, 5 and 6, Rule 130),
"O" Counter-Affidavit dated September To prove that the proceedsdespite the repeated
of Exhibit "K" and vehement objections of the
9, 1988 signed and submitted by petitioner, thereby
"L" in the total amount of ₱1,500.150 are in the wantonly refusing to exclude such
Johnson Lee possession and control of the accused and thatevidence, which actuation as
clearly inadmissible
both refused to in B.C.-I.S.embodied
No. 88-347, in his two (2) assailed Orders, is capricious,
deliver
the same to NMI despite consisting of 5 pages erroneous, as to amount to an
whimsical and patently
demand evasion of positive duty or to a virtual refusal to perform
the duty enjoined or to act at all in contemplation of law,
"O-1" Signature found on page 5 of Exhibit To prove the genuineness,and duethe remedy
above the of ordinary appeal would not afford
petitioner adequate and expeditious relief, for while

57
 available eventually, such remedy is cumbersome for it 3. DID THE COURT OF APPEALS ERR WHEN
requires petitioner to undergo a useless and time- IT RULED THAT THE FAILURE TO PRODUCE
consuming trial, and thus becomes an oppressive THE ORIGINAL OF A DOCUMENTARY
exercise of judicial authority; hence, the imperative EVIDENCE, CONSISTING OF PRIVATE
necessity for the issuance of a temporary restraining INSTRUMENTS DOES NOT VIOLATE THE
order or preliminary injunction requiring respondent judge BEST EVIDENCE RULE, INASMUCH AS
to refrain from further proceeding with Crim. Cases Nos. RECEIPT BY THE PETITIONER OF THE
10010 and 10011 until the Petition shall have been AMOUNT ALLEGEDLY MISAPPROPRIATED
disposed of, otherwise, failure of justice is sure to ensue.19 MAY BE PROVED BY EVIDENCE OTHER THAN
THE ORIGINAL OF THE SAID PRIVATE
On March 14, 2003, the Court of Appeals rendered judgment DOCUMENTS?
dismissing the petition for lack of merit.20
4. IS THE FINDING OF THE COURT OF
The Court of Appeals ruled that the charge invoices and the APPEALS THAT THE FACT OF LOSS OR
checks were not the best evidence to prove receipt by the DESTRUCTION OF THE CHECKS AND THE
accused of the amounts allegedly misappropriated; hence, the CHARGE INVOICES HAS BEEN ESTABLISHED
best evidence rule does not apply. It also held that even if the BY OTHER EVIDENCE, DEVOID OF SUPPORT
contents of the checks were the subject of inquiry, based on the BY THE EVIDENCE ON RECORD AND IS,
proofs adduced by the prosecution, such checks are admissible THEREFORE, A BARE CONCLUSION OR A
in evidence. The Court of Appeals declared that, in any event, the FINDING BASED ON SURMISE AND
prosecution proved the loss or destruction or non-availability of CONJECTURES?
the checks and charge invoices. The petitioner’s motion for
reconsideration of the decision suffered the same fate. 5. IS ANOTHER FINDING, IN THE FORM OF
ASSUMPTION, OF THE COURT OF APPEALS
The petitioner then sought relief from this Court, in a petition for THAT SINCE THE WITNESSES FOR THE
review on certiorari, and raises the following issues: PROSECUTION ARE OFFICERS WITH
AUTHORITY TO KEEP THE QUESTIONED
1. CAN (sic) PRIVATE DOCUMENT OFFERED DOCUMENTS, THEY NECESSARILY TOOK
AS AUTHENTIC BE RECEIVED IN EVIDENCE AND CONDUCTED A THOROUGH SEARCH
WITHOUT PROOF OF ITS DUE EXECUTION FOR THE MISSING DOCUMENTS, A MERE
AND AUTHENTICITY? CONJECTURE OR SURMISE OR A FINDING
GROUNDED ENTIRELY ON SPECULATION?
2. CAN SECONDARY EVIDENCE BE ADMITTED
WITHOUT PROOF OF ITS LOSS OR 6. DID THE COURT OF APPEALS VIOLATE THE
UNAVAILABILITY AND EXECUTION OF THE DICTUM OF THE COLD NEUTRALITY OF AN
ORIGINAL? IMPARTIAL JUDGE WHEN IT DENIED
PETITIONER’S MOTION FOR INHIBITION
GROUNDED ON ITS DISPLAY OF UNDUE

58
 INTERESTS AND WHEN A MEMBER THEREOF
HAS SEEN IT FIT AND APPROPRIATE TO
RECUSE HERSELF?21
The petitioner avers that the prosecution failed to prove the loss,
destruction or non-availability of the original copies of the checks
and charge invoices; that diligent efforts were undertaken to
locate the original copies of the checks and invoices; and that
said efforts were futile. He asserts that the witness competent to
prove the loss or destruction of the original of the checks would
be the records custodian of VMCI. Bayaban was not a competent
witness thereon, considering that she merely testified that the
clerk of the VMCI failed to locate the original copies of the checks
because the latter was lazy to search for the same. The petitioner
posits that the prosecution failed to prove the due execution and
authenticity of the charge invoices and the two checks through
the testimonies of Flores and Bayaban. He contends that
Bayaban even admitted that she was not privy to and had no
knowledge of the execution of the said checks and of the
signatories of the checks. The petitioner further avers that,
although the appellate court held that the photocopies of the
checks were admissible in evidence based on other proofs
adduced by the prosecution, it failed to specify the other proofs
adverted to by it.  capricious, whimsical, arbitrary or despotic manner in the
In its Comment on the petition, the Office of the Solicitor General
asserts that through the testimony of Bayaban, the due execution
and authenticity of the checks were proved by the prosecution as
well as the admissions of the petitioner in his counter-affidavit
during the preliminary investigation. It further averred that through
the testimonies of Bayaban and Flores, it proved, with reasonable
certainty, the loss or destruction of the original copies of the
checks and the charge invoices.
The issues for resolution are as follows: (a) whether or not the
petition at bar is the proper remedy of the petitioner; and (b)
whether or not the trial court committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction in admitting
59
in evidence the photocopies of the checks and charge invoices in
lieu of the original copies thereof.
The Ruling of the Court
In People v. Court of Appeals,22 we held that for a petition for
certiorari or prohibition to be granted, it must set out and
demonstrate, plainly and distinctly, all the facts essential to
establish a right to a writ.23 The petitioner must allege in his
petition and establish facts to show that any other existing
remedy is not speedy or adequate24 and that (a) the writ is
directed against a tribunal, board or officer exercising judicial or
quasi-judicial functions; (b) such tribunal, board or officer has
acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to excess or lack of jurisdiction; and, (c)
there is no appeal or any plain, speedy and adequate remedy in
the ordinary course of law.25
The trial court acts without jurisdiction if it does not have the legal
power to determine the case; there is excess of jurisdiction where
the respondent, being clothed with the power to determine the
case, oversteps its authority as determined by law. There is grave
abuse of discretion where the public respondent acts in a
exercise of its judgment as to be said to be equivalent to lack of
jurisdiction.26Mere abuse of discretion is not enough. A remedy is
plain, speedy and adequate if it will promptly relieve the petitioner
from the injurious effects of that judgment and the acts of the
tribunal or inferior court.27 A petition for certiorari cannot co-exist
with an appeal or any other adequate remedy. The existence and
the availability of the right to appeal are antithetical to the
availment of the special civil action for certiorari. These two
remedies are mutually exclusive.28
In a petition for certiorari, the jurisdiction of the court is narrow in
scope. It is limited to resolving only errors of jurisdiction. It is not
to stray at will and resolve questions or issues beyond its
competence such as errors of judgment. Errors of judgment of the
trial court are to be resolved by the appellate court in the appeal
by and of error or via a petition for review on certiorari under Rule
45 of the Rules of Court, as amended. Certiorari will issue only to
correct errors of jurisdiction. It is not a remedy to correct errors of
judgment.29 An error of judgment is one in which the court may
commit in the exercise of its jurisdiction, and which error is
reversible only by an appeal. Error of jurisdiction is one where the
act complained of was issued by the court without or in excess of
jurisdiction and which error is correctible only by the extraordinary
writ of certiorari.30 Certiorari will not be issued to cure errors made
by the trial court in its appreciation of the evidence of the parties,
its conclusions anchored on the said findings and its conclusions
of law thereon.31 As long as the court acts within its jurisdiction,
any alleged errors committed in the exercise of its discretion will
amount to nothing more than mere errors of judgment, correctible
by an appeal if the aggrieved party raised factual and legal
issues; or a petition for review under Rule 45 of the Rules of
Court if only questions of law are involved.32
In this case, there is no dispute that the RTC had jurisdiction over
the cases filed by the public respondent against the petitioner for
estafa. The Order admitting in evidence the photocopies of the
charge invoices and checks was issued by the RTC in the
exercise of its jurisdiction. Even if erroneous, the same is a mere
error of judgment and not of jurisdiction. Additionally, the
admission of secondary evidence in lieu of the original copies
predicated on proof of the offeror of the conditions sine qua non
to the admission of the said evidence is a factual issue addressed
to the sound discretion of the trial court.33 Unless grave abuse of
discretion amounting to excess or lack of jurisdiction is shown to
have been committed by the trial court, the resolution of the trial
court admitting secondary evidence must be sustained. The
remedy of the petitioner, after the admission of the photocopies of
the charge invoices and the checks, was to adduce his evidence,
and if after trial, he is convicted, to appeal the decision to the
appropriate appellate court. Moreover, under Rule 45 of the Rules
of Court, as amended, only questions of law may be properly
raised.  and damage are absent. They argue that there is no proof
60
In the final analysis, the threshold issue in this case is whether or
not the prosecution adduced evidence, testimonial and
documentary, to prove the predication to the admission of the
photocopies of the charge invoices34 and of the checks.35 The
petitioner posits that the prosecution failed to discharge its
burden, in contrast to the claim of the prosecution that it
succeeded in doing so. In resolving the petition at bar, the court
will have to delve into and calibrate the testimonial and
documentary evidence adduced by the parties in the trial court,
which the court is proscribed to do under Rule 45 of the Rules of
Court. This was the ruling of the Court in Johnson Lee v.
People:36
In other words, certiorari will issue only to correct errors of
jurisdiction and not to correct errors of procedure or
mistakes in the court’s findings and conclusions. An
interlocutory order may be assailed by certiorari or
prohibition only when it is shown that the court acted
without or in excess of jurisdiction or with grave abuse of
discretion. However, this Court generally frowns upon this
remedial measure as regards interlocutory orders. To
tolerate the practice of allowing interlocutory orders to be
the subject of review by certiorari will not only delay the
administration of justice but will also unduly burden the
courts.
We find that the allegations of the petitioners are not
sufficient grounds to qualify as abuse of discretion
warranting the issuance of a writ of certiorari. The
petitioners present factual contentions to absolve them
from the criminal charge of estafa. The criminal cases
concern corporate funds petitioners allegedly received as
payment for plastic bought by Victorias Milling
Corporation from NMI. They refused to turn over the
money to the trustee after NMI’s dissolution on the ground
that they were keeping the money for the protection of the
corporation itself. Thus, the elements of misappropriation
 that, as officers of the corporation, they converted the said
amount for their own personal benefit. They likewise claim
that they already turned the money over to the majority
stockholder of the defunct corporation.
Clearly, the said allegations are defenses that must be
presented as evidence in the hearing of the criminal
cases. They are inappropriate for consideration in a
petition for certiorari before the appellate court inasmuch
as they do not affect the jurisdiction of the trial court
hearing the said criminal cases but instead are defenses
that might absolve them from criminal liability. A petition
for certiorari must be based on jurisdictional grounds
because, as long as the respondent court acted with
jurisdiction, any error committed by it in the exercise
thereof will amount to nothing more than an error of
judgment which can be reviewed or corrected on appeal.
Moreover, the petition for certiorari before the Court of
Appeals was premature for the reason that there were
other plain and adequate remedies at law available to the
petitioners. Under Section 3(a) of Rule 117 of the Revised
Rules of Criminal Procedure, the accused can move to
quash the information on the ground that the facts do not
constitute an offense. There is no showing that the
petitioners, as the accused in the criminal cases, ever
filed motions to quash the subject informations or that the
same were denied. It cannot then be said that the lower
court acted without or in excess of jurisdiction or with
grave abuse of discretion to justify recourse to the
extraordinary remedy of certiorari or prohibition.
But it must be stressed that, even if petitioners did file
motions to quash, the denial thereof would not have
automatically given rise to a cause of action under Rule
65 of the Rules of Court. The general rule is that, where a
motion to quash is denied, the remedy is not certiorari but
to go to trial without prejudice to reiterating the special
61
defenses involved in said motion, and if, after trial on the
merits an adverse decision is rendered, to appeal
therefrom in the manner authorized by law. And, even in
the exceptional case where such denial may be the
subject of a special civil action for certiorari, a motion for
reconsideration must first be filed to give the trial court an
opportunity to correct its error. Finally, even if a motion for
reconsideration was filed and denied, the remedy under
Rule 65 would still be unavailable absent any showing of
the grounds provided for in Section 1 thereof. The petition
before the Court of Appeals, subject of this appeal, did
not allege any of such grounds.
Furthermore, a petition for review under Rule 45 of the
1997 Revised Rules of Civil Procedure before this Court
only allows questions of law. Inasmuch as petitioners’
defenses alleging circumstances that negate
misappropriation definitely require appreciation of facts,
i.e., testimonial and documentary evidence, this Court
cannot assess the merit of the said claims.37
Moreover, the factual findings of the Court of Appeals are
conclusive on the Court unless the petitioner is able to establish
that the findings of facts of the appellate court are not supported
by or are contrary to the evidence; or if the appellate court
ignored, misconstrued or misinterpreted vital facts and
circumstances, which, if considered, could change or even
reverse the outcome of the case. In this, the petitioner failed.
Rule 130, Section 3 of the Revised Rules of Court reads:
Original document must be produced; exceptions. – When
the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original
document itself, except in the following cases:
 (a) When the original has been lost or destroyed,
or cannot be produced in court without bad faith
on the part of the offeror;
(b) When the original is in the custody or under
the control of the party against whom the
evidence is offered, and the latter fails to produce
it after reasonable notice;
(c) 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;
(d) When the original is a public record in the
custody of a public officer or is recorded in a
public office.
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. 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. 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.38
The rule does not apply to proof of facts collateral to the issues
such as the nature, appearance or condition of physical objects or
to evidence relating to a matter which does not come from the
foundation of the cause of action or defense; or when a party
62
uses a document to prove the existence of an independent fact,
as to which the writing is merely collated or incidental.39
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;40 (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.41 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.42
If the document is one in which other persons are also interested,
and which has been placed in the hands of a custodian for
safekeeping, the custodian must be required to make a search
and the fruitlessness of such search must be shown, before
secondary evidence can be admitted.43 The certificate of the
custody of the document is incompetent to prove the loss or
destruction thereof. Such fact must be proved by some person
who has knowledge of such loss.44
The proponent is also burdened to prove the due execution or
existence of the original as provided in Rule 130, Section 5 of the
Revised Rules of Court:
When the original document is unavailable. – 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.
 Rule 132, Section 20 of the Revised Rules of Court
provides the procedure on how the authenticity and due
execution of a private document which is offered as
authentic may be proved:
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 testimony of an eyewitness as to the execution of a
private document must be positive. He must state that the
document was actually executed by the person whose
name is subscribed thereto.45 The admission of that party
against whom the document is offered, of the authenticity
and due execution thereof, is admissible in evidence to
prove the existence, authenticity and due execution of
such document.
In this case, there is no dispute that the original copies of the
checks were returned to VMCI after the same were negotiated
and honored by the drawee bank. The originals of the charge
invoices were kept by VMCI. There is also no dispute that the
prosecution offered the photocopies of the invoices in evidence to
prove the contents thereof, namely that: (a) VMCI purchased
203,500 empty bags from NMI for the total price of
₱1,500,150.00; (b) VMCI received the said goods in good order
and condition; and (c) NMI charged VMCI for the purchase price
of said goods. The prosecution offered the checks to prove the
63
contents thereof as well as the following: (a) VMCI drew and
delivered the checks to the NMI; (b) the said checks were
endorsed by the petitioner; and (c) the said checks were
deposited by the petitioner with the Solidbank which was not the
official depository of NMI. Thus, the prosecution was burdened to
prove the loss, destruction or its inability to produce in court
without bad faith on its part of the original copies of the said
invoices and checks without bad faith on its part.
We agree with the petitioner that the Certification signed by
Carolina Diaz was inadmissible in evidence against him because
of the failure of the prosecution to present her as witness and to
testify on said certification.
However, the records show that, in obedience to the subpoena
duces tecum and ad testificandum issued by the trial court
directing the VMCI to produce the originals of the checks and the
charge invoices, Bayaban, the Manager for Corporate Affairs of
VMCI, testified that all its records, including the charge invoices
and checks, were destroyed seven years ago in a flash flood
which occurred on November 28, 1995, and that such
loss/destruction was known to all the employees of VMCI,
including herself:
FISCAL ESQUILLA:
Q Please inform this Honorable Court how were you able
to appear this afternoon in connection with this case?
…
A The Legal Department, through the instruction of our
Chief Operating Officer, inquired from our Accounting
through our comptroller, Carolina S. Diaz to produce the
original copies of the two (2) checks which was mentioned
in the subpoena issued by Prosecutor Esquilla. And then,
through my direct Boss, the Chief Accountant, Mrs.
 Melanie Roa, instructed me to look into the two (2)
checks. And since the record is under my Department, I
immediately asked my subordinate to look for it. And, in
fact, she was also under my supervision when we looked
for the document. And I have already knowledge during
the November 28, 1995 due to flash flood, we lost our
records. And in fact, we have declaration to the Bureau of
Internal Revenue (BIR). And we also exhausted some
means to look for the documents, but we really cannot
produce the original copies of the checks, even the Xerox,
no more copies of the checks as requested.
…
Q Madam Witness, when you said that you instructed
your subordinate to look for the record, specifically, the
records being asked in the subpoena, the original copies
of the checks, these two (2) checks, will you please inform
this Honorable Court where these records in 1995
including these checks, of course, have been kept by your
office?
A It is kept at the Records Section Office just near my
table. It is just over there. It is just over there. The
distance is very near. We have the vault power cards and
all old records were kept are downstairs and the new
ones are kept upstairs. So, we don’t anticipate the flood
and because that was the first time that we were hit by
that flash flood.
…
Q So, you want to impress this Honorable Court that
those records which were kept downstairs your office
were carried or destroyed by this flash flood which
occurred in 1995 is that correct or is that what you mean?
64
A Yes, Your Honor.
…
Q And can you say that if these two (2) checks, subject of
this case now, were there downstairs and was destroyed
by the 1995 flash flood, can you say that before this
Honorable Court?
A Yes, Your Honor.
…
Q Aside from these checks downstairs which were
destroyed by this flash flood, what were the other records
that were kept there that were lost also?
A All our Bank Vouchers, some of our General Ledgers.
Actually, I cannot memorize it, but in our declaration to the
Bureau of Internal Revenue (BIR) we have listings of
those documents which were damaged by flash flood.
…
Q Alright, Madam Witness. So, when this
subpoena/subpoena (sic) duces tecum was received by
Victorias Milling Company, addressed to the Chief
Operating Officer, do I get from you that this was referred
to the Legal Affairs of VICMICO?
A Yes, Your Honor.
COURT:
Slowly, the stenographer may not be able to catch up with
you.
 FISCAL ESQUILLA:
I see. Sorry, Your Honor. And from the Legal Affairs,
where did it proceed, this subpoena or this was referred to
by the Legal Affairs to whom?
WITNESS:
A To Mrs. Carolina Diaz, the Comptroller.
FISCAL ESQUILLA:
Q You mentioned that she is your immediate Boss?
A I have also, next to her, Mrs. Melanie Roa, and I am
next to her.
Q And you are holding office there at VICMICO together
with the Comptroller, Carolina Diaz?
A We are in the same building.
Q And does she has a cubicle of her own?
A Yes, Your Honor.
Q And your table up to her cubicle, how far is your table
from her cubicle?
A They are very near. I can see from my place her office
and I can see anytime she went in and out of the room.
Maybe from here up to that next room.
COURT:
About 25 to 30 meters, more or less.
65
FISCAL ESQUILLA:
Q And, Madam Witness, may I know from you that who
requested you to testify because this Certification bears
the signature of Mrs. Diaz?
…
A Ah, Mrs. Diaz, in fact, ah – there is a Memo from the
Legal Affairs that we will submit the Certification to the
Honorable Court and the Memo was addressed to Mrs.
Diaz. And there was a note from Mrs. Diaz to my direct
Boss, the Chief Accountant, and then I was tasked by my
immediate Boss to attend to this.
Q How were you able to secure a Certification?
A A Certification was issued also upon our
recommendation to the Chief Accountant that we cannot
produce anymore the original copies of the said
document.
Q Who gave you that Certification so that you can bring
that today in Court?
A Marie Melanie G. Roa.
Q Do you have with you now the Certification?
A Yes, Your Honor.
Q And you are showing the original copy of the
Certification?
A Yes, Your Honor.
 Q I show to you the Certification dated December 6, 2001 And then the signature as identified by this witness, of her
issued by Carolina Diaz, Comptroller. Do you know whose immediate Boss, be encircled and marked as Exhibit "X-
signature is this? 1."

A That is the signature of Mrs. Carolina S. Diaz. COURT: 

Q How do you know that this is her signature? Mark it.

A I’m very much familiar with her signature because in our COURT INTERPRETER:
day to day undertakings in the office, I can see this in the
checks she signed, and in the Office Memorandum. And, Your last Exhibit is Exhibit "Y."
in fact, I also prepare some of the communications for her
signature. FISCAL ESQUILLA:

Q For the record, Madam Witness, will you please read I will change my Exhibit from Exhibit "X" and "X-1" to "Z"
the first paragraph of that Certification issued by Carolina and "Z-1." No further, Your Honor.
Diaz?
COURT: 
A "Victorias Milling Co., Inc. Certification. This is to certify
that Victorias Milling Co., Inc. no longer have the original
Do you want to cross?
copies of the BPI, Legaspi Village, Extension Office,
Legaspi St., Makati, Metro Manila, Check No. 068766
dated August 3, 1987 and Check No. 068993 dated ATTY. MAGDAMIT: 
August 19, 1987 as the same were destroyed by flash
flood that hit the province of Negros Occidental Yes, Your Honor.
particularly the City of Victorias on November 28, 1995."
COURT:
FISCAL ESQUILLA:
Alright, cross for the accused Moreno. We will give the
Your Honor, may I request that this Certification be Manila lawyer the first shot.
marked as our Exhibit "X" temporarily.
CROSS-EXAMINATION OF THE
COURT: 
WITNESS MERLITA T. BAYABAN
Mark it.
CONDUCTED BY ATTY. SIMEON M.
FISCAL ESQUILLA: 

66
 MAGDAMIT.
…
ATTY. MAGDAMIT
Q Madam Witness, when you received the subpoena, it
contained a photocopy of the checks that were being
requested, is that correct?
(At this juncture, there is no answer from the witness)
ATTY. MAGDAMIT: (Follow-up question)
Q Did it already contain a copy of the photocopy?
A Ah. Attached to the subpoena.
Q Have you seen this photocopy when you received the
subpoena? You did not see?
A Ah, actually, the subpoena was directed to the Legal.
Q You did not see. You did not see the photocopy?
May I know the point of Compañero, Your Honor.
WITNESS: (Answers before Atty. Magdamit)
A I remember it was presented to me by Mrs. Diaz.
ATTY. MAGDAMIT
Q Mrs. Diaz. So, let me just clear this up. The subpoena
did not immediately go to the Legal, it was presented to
you by Mrs. Diaz?
67
A No, it was presented by the Legal to our Comptroller.
Then . . .
...
COURT:
Q And then to?
A And then to me.
Q There is an initial, "MGR." Do you know who is that?
A That is Mrs. Melanie G. Roa, our Chief Accountant.
Q And from then, when it reached you, you were the ones
who sorted through the files, were you the one?
A Ah, my subordinate.
Q Ah, you were not the one?
A No, Your Honor.
Q Now, but you were certain – I withdraw that question.
When you received the subpoena with the attached
document, were you already aware that the records, the
original, were destroyed or you were not yet aware?
A Very much aware that the records were destroyed by
the flash flood because it was not only in that case that
we were tasked to look for the documents. There were
also Examiners from the Bureau of Internal Revenue who
asked for the documents prior to 1995 and that’s our
reason, we cannot produce the documents.
 Q Now, wait. Were you the only one who was aware that
this file was destroyed or was it a matter that was known
in your company?
A It was known to everybody.
Q It was known?
A Yeah.
Q So, can you conclude that just upon receiving the
subpoena and looking at the photocopy of the checks,
you would immediately know that this was among the files
that was destroyed by the flood?
A Yes, because of the date, 1995.
Q So, despite that knowledge, it still went through the
process and you still looked for it, is that correct?
A Yes, Your Honor.
Q So, despite of your knowledge that it was destroyed,
you still looked for it?
A Yeah, we still looked for it because there might be some
files to prove that it was really our check issuance. So
even our files, even our Bank Recon, we cannot produce
it.46
Contrary to the claim of the petitioner, the prosecution adduced
preponderant evidence to prove the existence, the due execution
and the authenticity of the said checks and charge invoices
consisting of the admission of no less than the petitioner in his
counter-affidavit. The petitioner admitted therein that he received
the total amount of ₱1,500,150.00 from VMCI in full payment of
68
the delivery and sale of the empty bags by NMI to VMCI and that
the said amount was in the custody of the said corporation, thus:
6. That the collection by the Corporation of the amount of
₱1,500,150.00 is a valid act of the corporation; that it is
the full and complete and just payment for the three
deliveries of plastic materials by the Neugene Marketing,
Inc to Victorias Milling Company on June 11, 1987, June
18, 1987 and June 25, 1987 when I was and I am still the
President and Mr. Sonny Moreno, General Manager of
the Neugene Marketing, Inc. and that the said Victorias
Milling Company paid in full and payments were made to
the Corporation and it is only a legitimate act of the
Neugene Marketing, Inc. in the regular course of business
to receive payment for the obligations of its customers to
the Corporation;
7. That with respect to the demand letter addressed to me
to turn over aforesaid ₱1,500,150.00, the said amount is
money of the Neugene Marketing, Inc. and the
corporation is the legitimate possessor thereof and that
Reyes, Treyes, and Fudolin Law Firm has no right or
authority to make the demand letter; and that it is the
corporation that holds the money and that personally,
neither I nor Sonny Moreno can just take the money to
give to Reyes, Treyes and Fudolin Law Firm which cannot
be trusted and which is an unauthorized entity to receive,
hold and possess said funds or to file this case;
8. That the amount of ₱1,500,150.00 the corporate funds
of the Neugene Marketing, Inc. unless authorized by the
members of the Board of Directors, neither I nor Sonny
Moreno can dispose of the said sum of money and it is
the corporation that is holding the said amount and
holding it to answer for corporation expenses on its
business operations and to answer for obligations to its
creditors including the claims of Sonny Moreno and
myself for unpaid compensation, salaries, fringe benefits,
 allowances and shares in the profits of the Corporation; c. As Trustee of Neugene Marketing, Inc., the Reyes,
and that therefore, it is beyond our authority or power to Treyes & Fudolin Law Firm sent a demand letter
refuse the turn over or to turn over the aforesaid amount; addressed to Johnson Lee to turn over aforesaid
and that if there is evidence of the malicious and criminal ₱1,500,150.00. …
intent to appropriate the same for personal benefit that is
more applicable to Reyes, Treyes and Fudolin who d. As of the date of this Affidavit-Complaint, Johnson Lee
apparently without any legal authority and illegally posing and/or Sonny Moreno have failed to deliver aforesaid sum
as a trustee when as a matter of fact, they have never to the herein trustee contrary to law.
been appointed or designated a[s] trustee by the
Neugene Marketing, Inc.; and therefore, complainants 4. Johnson Lee and/or Sonny Moreno have no authority
should be the one held criminally responsible for the whatsoever to withhold aforesaid sum of ₱1,500,150.00
illegal "dissolution" of the Neugene Marketing, Inc., and and their refusal to turn over aforesaid amount is
for which they will be charged with the corresponding evidence of a malicious and criminal intent to appropriate
action for falsification and perjury for having been able to the same for their own personal benefit.48
secure a Certification of Dissolution from the Securities
and Exchange Commission by means of false pretenses
With the admissions of the petitioner in his counter-affidavit, the
and representations;47
prosecution even no longer needed to adduce evidence aliunde
to prove the existence, due execution and the authenticity of the
It bears stressing that the counter-affidavit of the petitioner was charge invoices and the checks.
adduced in evidence by the prosecution precisely to prove the
existence, authenticity and due execution of the original of the
All told then, the prosecution mustered the requisite quantum of
said charge invoices and checks and the trial court admitted the
evidence to prove the predicates to the admission of the
same for the said purpose.
photocopies of the charge invoices and checks.
By his counter-affidavit, the petitioner, in effect, admitted the
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.
allegations of the affidavit-complaint of the trustee of NMI:
The assailed decision of the Court of Appeals is AFFIRMED. No
costs.
a. Sometime on June 11, 1987, June 18, 1987 and June
25, 1987, respectively, NEUGENE MARKETING, INC.
SO ORDERED.
made three (3) deliveries of plastic materials to Victorias
Milling Company, Victorias, Negros Occidental totalling
₱1,500,150.00 covered by Charge invoices …

b. Aforesaid charge invoices were subsequently paid by

Victorias Milling Company in full and payments delivered
to Johnson Lee and/or Sonny Moreno, as President and
General Manager of Neugene Marketing, Inc.

69

13. FIRST DIVISION
[G.R. No. 175369, February 27, 2013]
TEGIMENTA CHEMICAL PHILS. AND VIVIAN ROSE
D. GARCIA, Petitioners, v. MARY ANNE
OCO, Respondents.
70
Starting 5 September 2001, respondent worked as a
clerk, and later on as a material controller, for petitioner
Tegimenta Chemical Philippines, Incorporated
(Tegimenta), a company owned by petitioner Vivian Rose
D. Garcia (Garcia).
By reason of her pregnancy, Oco incurred numerous
instances of absence and tardiness from March to April
2002. Garcia subsequently advised her to take a
vacation, which the latter did from 1 to 15 May 2002.
On her return, Oco immediately worked for the next four
working days of May. However, on 21 May 2002, Garcia
allegedly told her to no longer report to the office
effective that day. Hence, respondent no longer went to
work. She nevertheless called petitioner at the end of the
month, but was informed that she had no more job to
do.
Immediately thereafter, on 3 June 2002, respondent filed
a Complaint for illegal dismissal and prayed for
reinstatement and back wages before the LA. Later on,
she amended her Complaint by asking for separation pay
instead of reinstatement.
In her Position Paper,6 Oco maintained that petitioner
verbally dismissed her without any valid cause and
without due process. To bolster her story, respondent
adduced that Tegimenta hired new employees to replace
her. In their defense, petitioners countered that she had
abandoned her job by being continuously absent without
official leave (AWOL). They further narrated that they
could not possibly terminate her services, because she
still had to settle her accountabilities.7
The LA disbelieved the narration of petitioners and thus
ruled in favor of respondent. The arbiter deduced that
the employer only wanted to “make it appear that the
complainant was not dismissed from employment, as she
could not prove it with any Memorandum issued to that
effect and yet, they also maintain that complainant was
AWOL.”8 The LA further observed that petitioners did not
deny the main claim of respondent that she had simply
been told not to report for work anymore.
Aggrieved, petitioners appealed to the NLRC. They
assailed the ruling of the LA for having been issued based
not on solid proof, but on mere allegations of the
employee.9 They advanced further that Oco had
abandoned her employment, given that she claimed
separation pay instead of reinstatement.
The NLRC reviewed the records of the case and found
that the documentary evidence coincided with the
allegations of Oco.10Consequently, it affirmed her claim
that Garcia, without advancing any reason and without
giving any written notice, had categorically told her not
to work for Tegimenta anymore. Accordingly, the NLRC
sustained the illegality of respondent’s dismissal.11
On Motion for Reconsideration, the NLRC still affirmed
the LA’s Decision  in toto.12 Thus, petitioners pursued
their action before the CA via a Rule 65 Petition.
Alleging grave abuse of discretion amounting to lack or
excess of jurisdiction, petitioners again assailed the
71
factual determinations of the LA and the NLRC. In doing
so, they attacked Oco’s allegations for being inconsistent
with the evidence on record.
Petitioners reiterated the following before the CA: (1) the
payroll sheets from May to August 2002 belied the claim
of Oco that Tegimenta had hired new employees to
replace her; (2) the time cards showing respondent’s
attendance in the office on 21 May 2002 negated the
story that Garcia had verbally instructed her not to report
for work starting from the said date; and (3) the
Complaint that Oco filed before the LA, stating that she
was fired on 3 June 2002, contradicted her allegation in
her Position Paper that she was ultimately terminated on
30 May 2002 – a discrepancy of three days.13 The
employer also highlighted the marginal notation on the
16 to 30 June 2002 payroll sheet, which indicated that
the company considered respondent “on leave.”
Appreciating these inconsistencies, together with the
marginal notes in the payroll sheet, the CA overturned
the courts a quoand pronounced that no actual dismissal
transpired; rather, Oco was merely on AWOL.
Subsequently, respondent sought reconsideration. She
insisted that petitioners actually terminated her services,
and that they failed to discharge their burden to prove
that it was she who had abandoned work by being on
AWOL.
This time around, the CA reversed its earlier
ruling.14 Albeit belatedly, the CA realized that (1) the
alleged hiring of new employees, (2) the presence of Oco
in the office on the day of her termination, and (3) the
three-day discrepancy between the date of her dismissal,
stated in her Complaint  before the LA and that in her
Position Paper were all immaterial to the threshold
question of whether she abandoned her work or was
illegally dismissed.
Proceeding therefore with the main issue, the CA
debunked petitioners’ insistence that Oco abandoned her
employment by being on AWOL. Firstly, it noted that she
reported for work right after her vacation, an act that
indicated her intention to resume her employment. In
this light, petitioners failed to prove that she had
intended to abandon her work. The appellate court
held:15
A deeper study of the records show that Tegimenta failed
to adduce proof of any overt act of Oco that clearly
and unequivocably showed her intention to abandoned
her work when she allegedly absented herself without
leave. The absences incurred by Oco do not indicate that
she already abandoned her work, especially
considering that Oco reported for work after the
agreed dates of her vacation leave, and she
subsequently filed an illegal dismissal case against
Tegimenta. (Emphasis supplied).
Secondly, the CA rejected the payroll sheets as proof
that Oco was on AWOL. It held that the company’s
marginal notes reflecting that she was “on leave” had no
supporting attachments. It even construed the notations
as incompetent evidence because, despite her absence,
the payroll sheets for July 2002 onwards had no
notations at all that she was “on leave.”16
Thirdly, the CA dismissed petitioners’ argument that Oco
had effectively abandoned her work and waived her claim
72
for back wages when she changed her prayer from
reinstatement to separation pay. The appellate court
simply explained that opting for separation pay, in lieu of
reinstatement, could not support the allegation that Oco
abandoned her work; and that the relief for separation
pay did not preclude the grant of back wages, as these
two awards were twin remedies available to an illegally
dismissed employee.
Completely dissatisfied with the reversal of their fortune,
petitioners implore this Court (1) to discredit the
allegation of Oco that she had in fact been dismissed by
them and (2) to make a finding that she abandoned her
work by being on AWOL.
RULING OF THE COURT
The Factual Determination of 
the Employee’s Dismissal  
Prefatorily, the inquiry into whether Garcia verbally fired
Oco and whether the employee abandoned her job are
factual determinations generally beyond the jurisdiction
of this Court;17and in addition to the weakness of
petitioners’ case, all the courts below consistently
affirmed the certainty of the employee’s dismissal by the
employer.18
An established doctrine in labor cases is that factual
questions are for labor tribunals to resolve. Their
consistent findings are binding and conclusive and will
normally not be disturbed, since this Court is not a trier
of facts.19 Therefore, on the basis of these circumstances
alone, the appeal before us already deserves scant
consideration.

Nevertheless, petitioners adamantly try to persuade this
Court to believe their narration that they did not dismiss
Oco. To prove their version of the story, they poke holes
in her narration by harping on her allegedly false claim
that Tegimenta hired replacements and by faulting her
for rendering work on the very day that her services
were supposedly terminated. Unfortunately, these
purported defects in her narration cannot carry the day
for petitioners.
According to the CA, the hiring of new employees and the
presence of Oco on the day of her termination were all
immaterial to resolving the issue of whether she was on
AWOL or was illegally dismissed. We find this
appreciation to be correct. Courts consider the evidence
as material if it refers to the be-all and end-all of a
petitioner’s cause.20 Here, none of the loopholes can
resolve the case, since it is expected that dismissals may
occur even if no prior replacements were hired, and an
employer can indeed attempt to terminate employees on
any day that they come in for work.
Petitioners also make a big fuss about the differing
termination dates that Oco stated in her Complaint (3
June 2002) and her Position Paper (30 May 2002). But
in Prieto v. NLRC,21 we held that employees who are not
assisted by lawyers when they file a complaint with the
LA may commit a slight error that is forgivable if rectified
later on.
Here, Oco only had one inadvertence when she filled out
the Complaint in template form. She also stated in all her
subsequent pleadings before the LA, the NLRC, the CA
and this Court that she was dismissed on 30 May 2002.
73
On this point, we similarly rule by regarding the
inaccuracy as an error that is insufficient to destroy her
case.
Most notably, the LA observed that the employers “did
not deny the claims of complainant [Oco] that she was
simply told not to work.”22 As in Solas v. Power &
Telephone Supply Phils. Inc.,23this silence constitutes an
admission that fortifies the truth of the employee’s
narration. Section 32, Rule 130 of the Rules Court,
provides:
An act or declaration made in the presence and within
the hearing or observation of a party who does or says
nothing when the act or declaration is such as naturally
to call for action or comment if not true, and when
proper and possible for him to do so, may be given in
evidence against him.
Considering this rule of evidence, together with the
immaterial discrepancies, this Court thus rules against
wholly invalidating the findings of the courts a quo.
The Employer’s Defense of Absence
without Official Leave  
After unsuccessfully assailing the narration of the
employee, petitioners argue that Oco abandoned her job
by being on AWOL. As bases for this affirmative defense,
they highlight her previous instances of absence and
tardiness. Then, they emphasize the marginal notes in
the 16 to 30 June 2002 payroll, which showed that she
was on leave. Finally, they equate the employee’s act of
asking for separation pay instead of reinstatement as an
act of abandonment.
The bases cited by petitioners are bereft of merit.
First, the nonappearance of Oco at work was already
accepted by the company as having resulted from
complications in her pregnancy. In fact, Garcia herself
offered respondent a vacation leave. Therefore, given
that the absences of the latter were grounded on
justifiable reasons, these absences cannot serve as the
antecedent to the conclusion that she had already
abandoned her job. 24
For abandonment to exist, two factors must be present:
(1) the failure to report for work or absence without a
valid or justifiable reason; and (2) a clear intention to
sever the employer-employee relationship, with the
second element as the more determinative factor being
manifested by some overt acts.25
The mere absence of an employee is not sufficient to
constitute abandonment. 26 As an employer, Tegimenta
has the burden of proof to show the deliberate and
unjustified refusal of the employee to resume the latter’s
employment without any intention of returning.27
Here, Tegimenta failed to discharge its burden of proving
that Oco desired to leave her job. The courts a
quo uniformly found that she had continuously reported
for work right after her vacation, and that her office
attendance was simply cut off when she was categorically
told not to report anymore. These courts even noted that
she had also called up the office to follow up her status;
and when informed of her definite termination, she lost
no time in filing a case for illegal dismissal.  Evidently,
her actions did not constitute abandonment and instead
implied her continued interest to stay employed.
74
Second, the marginal notes in the 16 to 30 June 2002
payroll showing that she was on leave are dubious. For
one, the CA dutifully detected that none of the
succeeding payroll sheets indicated that Oco was
considered by the company as merely AWOL. Hence, it
becomes questionable whether there is regularity in
making simple notations  as Tegimenta’s reference in
considering the status of an employee. Therefore, we
hold that the marginal notations in a single payroll sheet
are not competent proofs to back up petitioner’s main
defense.
This Court also rejects the invocation by petitioners of
the best-evidence rule. According to them, the payroll
sheet, and not the mere allegation of Oco, is the best
evidence that they did not terminate her.
However, petitioners seem to miss the whole import of
the best- evidence rule. This rule is used to compel the
production of the original document, if the subject of the
inquiry is the content of the document itself.28 The rule
provides that the court shall not receive any evidence
that is merely substitutionary in nature, such as a
photocopy, as long as the original evidence of that
document can be had.29
Based on the explanation above, the best-evidence rule
has no application to this case. The subject of the inquiry
is not the payroll sheet of Tegimenta rather, the thrust of
this case is the abundance of evidence present to prove
the allegation that Oco abandoned her job by being on
AWOL. Consequently, the employer cannot be logically
stumped by a payroll sheet, but must be able to submit
testimonial and other pieces of documentary evidence –
like leave forms, office memos, warning letters and
notices – to be able to prove that the employee
abandoned her work.
Finally, petitioners posit that Oco’s act of replacing the
prayer for reinstatement with that for separation pay
implied that respondent abandoned her employment.
Abandonment is a matter of intention and cannot lightly
be inferred or legally presumed from certain equivocal
acts.30 For abandonment to be appreciated, there must
be a “clear, willful, deliberate, and unjustified refusal of
the employee to resume employment.”31 Here, the mere
fact that Oco asked for separation pay, after she was told
to no longer report for work, does not reflect her
intention to leave her job. She is merely exercising her
option under Article 279 of the Labor Code, which entitles
her to either reinstatement and back wages or payment
of separation pay.
adhere to its decision will cause injustice to a party-
litigant.”33 Thus, upon finding that petitioners had indeed
illegally dismissed respondent, the CA merely exercised
its prerogative to reverse an incorrect judgment.
IN VIEW THEREOF, the 24 April 2006 Resolution of the
Court of Appeals in CA-G.R. CV No. 87706 is AFFIRMED.
The 12 May 2006 Petition for Review on Certiorari filed
by Tegimenta Chemical Philippines, Incorporated and
Vivian Rose D. Garcia is hereby DENIED for lack of
merit.
SO ORDERED.

As an end note, petitioners advance a procedural lapse

on the part of the CA. They argue that since no new
facts, evidence or circumstances were introduced by
respondent to the appellate court, it cannot issue a
Resolution that reverses its earlier Decision.

In Astraquillo v. Javier,32 we have similarly dealt with this

contention and considered it as flawed. Our procedural
laws allow motions for reconsideration and their
concomitant resolutions, which give the same court an
opportunity to reconsider and review its own ruling.

As stated in Section 5(g) of Rule 135, every court shall

have the inherent power to amend and control its
processes and orders, so as to make them conformable
to law and justice. “This power includes the right to
reverse itself, especially when in its honest opinion it has
committed an error or mistake in judgment, and that to

75
 The parties herein are relatives by affinity. Petitioner Alice
Tapayan is the sister of Clark Martinez's (Clark) wife. Clark is
Respondent's son.

Respondent is the registered owner of a parcel of land situated

along Pingol Street, Ozamiz City, covered by Original Certificate
of Title (OCT) No. P-1223 (Pingol Property).4 Based on the
records, it appears that two (2) mortgages were constituted over
this property - the first in favor of Philippine National Bank (PNB
Mortgage ), and the second in favor of Development Bank of the
Philippines (DBP Mortgage). The particulars of these mortgages
are summarized as follows:

Mortgage Parties Purpose

PNB Mortgage Respondent as mortgagor To secure a One Hundred

and Philippine National Thousand Peso
Bank, Ozamiz Branch (PNB) (₱100,000.00) loan in the
as mortgagee name of Respondent 5

DBP Mortgage Respondent as mortgagor To secure a One Million

and Development Bank of Peso (₱1,000,000.00)
the Philippines, Ozamiz renewable credit line in the
Branch (DBP) as mortgagee name of Petitioners (DBP
Loan) 6

The records further show that Respondent agreed to constitute

the DBP Mortgage upon Clark's request,  and that, in order to
7

release the Pingol Property from the PNB Mortgage, the

Petitioners and Respondent agreed to utilize a portion of the
14. G.R. No. 207786 proceeds of the DBP Loan to settle the remaining balance of
Respondent's PNB Loan, then amounting to Sixty-Five Thousand
Three Hundred Twenty Pesos and 55/100 (₱65,320.55). 8

SPOUSES MARCELIAN TAPAYAN and ALICE

TAPAYAN, Petitioners, 
vs. Subsequently, the parties herein executed a Deed of Undertaking
PONCEDA M. MARTINEZ, Respondent. dated August 29, 1998 (Deed of Undertaking) in reference to the

76
DBP Mortgage. The Deed of Undertaking bears the following
stipulations, to wit:
1. that the "Second Party [Respondent] has no liability
whatsoever insofar as the aforesaid loan contracted by the First
Party [Petitioners] concerned;"
2. that "to secure the aforesaid amount, the First Party
[Petitioners] shall execute a second mortgage in favor of the
Second Party [Respondent] over his House and Lot covered by
TCT No. T-10143, situated at Carangan, Ozami[z] City x x x" 9 their indebtedness nor executed a mortgage over the Carangan
3. x x x
4. [t]hat in the event the First Party [Petitioners] could not pay the
loan and consequently, the property of the Second Party
[Respondent] is foreclosed and is not redeemed by the First Party
[Petitioners] with[in] the one (1) year redemption period; or in
case the loan shall be paid by the Second Party [Respondent]
just to save the property from being foreclosed, the First Party
[Petitioners] shall acknowledge as his indebtedness the amount
due to the Development Bank of the Philippines upon foreclosure
or the amount paid by the Second Party [Respondent] in paying
the loan, but in either case shall be deducted therefrom the
amount of P65,320.55 plus interests and fees paid by the First
[P]arty [Petitioners] to PNB, Ozamiz City[.]   (Emphasis and
10
underscoring omitted)
The DBP Loan was not paid when it fell due.
Proceedings before the RTC
On September 14, 1999, Respondent filed a complaint for
Specific Performance with Damages (Complaint) against
Petitioners before the RTC.  The Complaint sought to compel
11
Petitioners to constitute a mortgage over their house and lot
situated in Carangan, Ozamiz City covered by Transfer Certificate
77
of Title (TCT) No. T-10143 (Carangan Property), in accordance
with the provisions of the Deed of Undertaking. 12
Respondent averred that Petitioners used the proceeds of the
DBP Loan exclusively for their own purposes,   and that since
13
Petitioners failed to pay the DBP Loan, she and her children were
constrained to pay DBP the sum of One Million One Hundred
Eighty Thousand Two Hundred Pesos and 10/100
(₱1,180,200.10) to save the Pingol Property from
foreclosure.   Notwithstanding this, Petitioners have neither paid
14
Property to secure the same.  15
The Petitioners denied Respondent's allegations and claimed that
the Deed of Undertaking "is a falsity." 
16
Petitioners argued that the proceeds of the DBP Loan were
primarily used as capital for the construction business that
petitioner Marcelian put up with Clark, Mario Delos Reyes, and
Richard Sevilla (collectively, Joint Venturers).  Petitioners
17
supposedly applied for the DBP Loan in furtherance of the verbal
agreement among the Joint Venturers, while Respondent freely
agreed to constitute the DBP Mortgage to secure said loan upon
Clark's request.  Petitioners further emphasized that a portion of
18
the proceeds of the DBP Loan was used to pay off the balance of
Respondent's PNB Loan.   Moreover, while the DBP Loan was in
19
the nature of a renewable credit line, it was not renewed since
Respondent refused to give her written consent for this purpose.  20
On the procedural aspect, Petitioners argued that Respondent's
Complaint was premature and should have been be dismissed
outright, since she failed to resort to barangay conciliation
proceedings before filing her Complaint with the RTC. 21
To support their allegations, Petitioners presented a Joint Affidavit
executed by Mario Delos Reyes and Richard Sevilla, attesting to
the formation of the joint venture and the conclusion of the verbal
agreement to apply for the DBP Loan in the interest of the Joint
Venturers. 22
After trial, the RTC rendered a decision dated September 28,
2009 in favor of Respondent (RTC Decision), the dispositive
portion of which reads:
WHEREFORE premises considered, judgment is hereby
rendered ordering defendant spouses Atty. Marcelian and Alice
Tapayan to execute the second mortgage of (sic) their lot and
house covered by Transfer Certificate of Title No. T-10143
located at Carangan, Ozamiz City in favor of plaintiff Mrs.
Ponceda Martinez, unless they reimburse the latter of the total
amount of P 1, 180,200.10 paid by her to the Development Bank
of the Philippines, Ozamiz Branch for the redemption of the
mortgage, and requiring defendants to pay to plaintiff the amount
of P20,000.00 for attorney's fees.
SO ORDERED. 23
In so ruling, the RTC noted that the Deed of Undertaking was
acknowledged before Atty. Emmanuel V. Chiong, a notary public,
and reasoned that since the latter enjoys the presumption of
having performed his duties regularly, Petitioners' claim that the
Deed of Undertaking was a falsity must be rejected.  On such
24
basis, the RTC held that the Deed of Undertaking constitutes a
valid and binding contract, which Petitioners are bound to
respect. 
25
Proceedings before the CA
Aggrieved, Petitioners elevated the case to the CA. In their
appeal, Petitioners prayed that the CA determine (i) whether the
RTC validly acquired jurisdiction over the Complaint
notwithstanding Respondent's failure to comply with the
Revised Katarungang Pambarangay Law, (ii) whether
Respondent is an accommodation mortgagor, and (iii) whether
78
the Petitioners may be compelled to constitute a mortgage over
the Carangan Property in Respondent's favor.  26
On May 30, 2013, the CA rendered the assailed Decision denying
the Petitioners' appeal. The dispositive portion of the assailed
Decision reads:
WHEREFORE, premises considered, the instant appeal is
hereby DENIED. The Decision of the RTC dated 28 September
2009 is hereby AFFIRMED. Defendants-appellants are ordered to
execute the Second Mortgage on their house and lot covered by
Transfer Certificate of Title (TCT) No. T-10143 in favor [of]
plaintiff-appellee. Costs against appellants.
SO ORDERED. 27
Contrary to the Petitioners' claim, the CA found that the
requirements of the Katarungang Pambarangay Law were
complied with, as evidenced by the Certificate to File Action filed
by the Lupon Tagapamayapa before the RTC on August 16,
2000. 28
Moreover, the CA held that the Deed of Undertaking merits
consideration, since Petitioners failed to overcome the
presumption of regularity ascribed to it as a public
document.  Thus, on the basis of the stipulations in the Deed of
29
Undertaking, the CA concluded that Respondent indeed stood as
Petitioners' accommodation mortgagor. Hence, Respondent
possesses the right to enforce the Deed of Undertaking and
compel Petitioners to comply with its stipulations.  30
Petitioners received a copy of the assailed Decision on June 13,
2013. 31
On June 27, 2013, Petitioners filed a motion praying for an
additional period of thirty (30) days within which to file a petition
for review on certiorari before this Court.  Thereafter, on July 26,
32
2013, Petitioners filed this Petition, ascribing multiple errors to the
CA.
Respondent filed her Comment to the Petition on May 30,
2014.  Petitioners filed their Reply on October 17, 2014.
33 34
On February 26, 2015, the Court received a notice from
Respondent's counsel of record, informing the Court of
Respondent's death. The notice identified the Respondent's eight
(8) children as her legal representatives, namely: Clark, Jeff
Martinez, Rock Martinez, Gary Martinez, Patricia Martinez Olson,
Eleanor Martinez Fassnacht, Treccie Martinez Kappes, and
Sheila Martinez Sachs.  35
Issue
The sole issue for this Court's resolution is whether the CA erred
in affirming the R TC Decision directing Petitioners to execute a
mortgage over the Carangan Property in favor of Respondent.
The Court's Ruling
As a rule, only questions of law may be raised in petitions filed
under Rule 45,  subject only to recognized exceptions, namely:
36
(1) when the findings are grounded entirely on speculation,
surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the Court of Appeals
went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee; (7) when
the findings are contrary to the trial court; (8) when the findings
are conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as well
as in the petitioner's main and reply briefs are not disputed by the
79
respondent; (10) when the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence
on record; and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion.
x x x  (Emphasis supplied; citations omitted)
37
The Petition invokes the fourth exception above, and calls on this
Court to review the factual findings of the RTC, which were later
affirmed by the CA.
In sum, Petitioners pose that the CA erred when it affirmed the
following factual findings of the RTC:
1. The Deed of Undertaking presented by Respondent is
genuine, and constitutes a valid and binding contract
enforceable against Petitioners;
2. Petitioners applied for the DBP Loan for their own
interest and sole account;
3. Petitioners are bound to reimburse Respondent One
Million One Hundred Eighty Thousand Two Hundred
Pesos and 10/100 (₱l,180,200.10) representing the
amount she and her daughters paid to avert the
foreclosure of the DBP Mortgage; and
4. To secure the full amount due Respondent, Petitioners
are bound to constitute a mortgage over the Carangan
Property, pursuant to the provisions of the Deed of
Undertaking.
The Court holds that no misapprehension of facts was committed
by both the RTC and the CA so as to justify deviation from their
findings, except only as to the RTC's finding regarding the
amount that Petitioners are bound to reimburse to Respondent.
Petitioners waived their right to object
to the admission of the Deed of
Undertaking on the basis of the best
evidence rule.
In this Petition, Petitioners assert that the R TC and CA erred in
ruling that the plain copy of the Deed of Undertaking was
admissible as proof of its contents, in violation of the best
evidence rule under Rule 130 of the Rules of Court.
Petitioners' assertion is erroneous.
The best evidence rule requires that the original document be
produced whenever its contents are the subject of
inquiry,  except in certain limited cases laid down in Section 3 of
38
Rule 130. However, to set this rule in motion, a proper and timely
objection is necessary. The Court's ruling
in Lorenzana v. Lelina is instructive:
39
The best evidence rule requires that when the subject of inquiry is
(sic) the contents of a document, no evidence is admissible other
than the original document itself except in the instances
mentioned in Section 3, Rule 130 of the Revised Rules of Court.
As such, mere photocopies of documents are inadmissible
pursuant to the best evidence rule. Nevertheless, evidence not
objected to is deemed admitted and may be validly
considered by the court in arriving at its judgment. Courts
are not precluded to accept in evidence a mere photocopy of
a document when no objection was raised when it was
formally offered.
In order to exclude evidence, the objection to admissibility of
evidence must be made at the proper time, and the grounds
specified. Objection to evidence must be made at the time it is
formally offered. In case of documentary evidence, offer is
made after all the witnesses of the party making the offer
have testified, specifying the purpose for which the evidence
80
is being offered. It is only at this time, and not at any other,
that objection to the documentary evidence may be
made. And when a party failed to interpose a timely objection
to evidence at the time they were offered in evidence, such
objection shall be considered as waived. This is true even if by
its nature the evidence is inadmissible and would have surely
been rejected if it had been challenged at the proper time.
Moreover, grounds for objection must be specified in any
case. Grounds for objections not raised at the proper time
shall be considered waived, even if the evidence was
objected to on some other ground. Thus, even on appeal, the
appellate court may not consider any other ground of
objection, except those that were raised at the proper
time.  (Emphasis and underscoring supplied; citations omitted)
40
The Court notes that Petitioners failed to object to the admission
of the plain copy of the Deed of Undertaking at the time it was
formally offered in evidence before the RTC. In fact, in their
Reply, Petitioners admit that they only raised this objection for
the first time before the CA. The relevant portions of said Reply
state:
Instead of arguing against the truth of this established fact, the
respondent made an implied admission of the truth thereof when
she shifted instead to raise the argument that petitioner cannot
raise this issue for the first time in this petition. Respondent said:
"I That petitioners have raised issues of facts before this
Honorable Court not otherwise raised in the court a quo."
xxxx
NOTHING CAN BE MORE WRONG!
Petitioner certainly raised the issue covered by Ground I of this
Petition in the lower [c]ourt. Unfortunately, with utmost due
respect, it inadvertently escaped the attention of the Honorable
Court of Appeals. It was only very unfortunate that petitioner
failed to give it a superlative emphasis adequate enough so as
not to be ignored by the lower court. It can also be reasonably
surmised that the new counsel of respondent may not have
perused in detail the appellant's brief in the Court of
Appeals, of which brief brought this issue under the Issue No
"E.1 THERE WERE CIRCUMSTANTIAL EVIDENCE THAT THE
DEED OF UNDERTAKING WAS FALSIFIED."
For easy reference, the averments on pages 31 to 33 of
the Appellant's Brief in the Court of Appeals are hereby
repleaded and reiterated as follows:
xxxx
"Aside from the obtaining circumstances earlier discussed herein
that the Deed of Undertaking (Exh. "K") is a falsified document,
the records will show that plaintiff caused only a temporary
marking of a machine copy of the same, placed as an annex to
the Complaint and in a review of the records, defendants could
not find that plaintiff caused a substitution of the temporarily
marked machine copy with an original thereof, then subsequently
marked after being identified by plaintiff witness Ponceda
Martinez. x x x
x x x x"
Verily, it is crystal clear that Ground I is not raised for the first time
in this petition. It is admitted, however, that there was no
highest emphasis given to the same as it was placed in the
last pages of the discussion in the appellant's brief. Albeit the
inadvertence, it is now given the greatest emphasis and
significance by placing it under Ground I of this Petition because
petitioners rationally and realistically believe that it goes into the
heart of this Petition.  (Emphasis and underscoring supplied)
41
81
Having failed to timely raise their objection when the Formal Offer
of Evidence was filed in the RTC, Petitioners are deemed to have
waived the same. Hence, they are precluded from assailing the
probative value of the plain copy of the Deed of Undertaking.
Petitioners failed to rebut the
presumption of regularity ascribed to
the Deed of Undertaking as a notarized
public document.
Notwithstanding the findings of the RTC and CA, Petitioners still
assail the genuineness and due execution of the Deed of
Undertaking before this Court. Petitioners insist that the Deed of
Undertaking is a falsity and should not be given credence.
The Court disagrees.
As correctly held by the R TC and CA, the Deed of Undertaking
became a public document by virtue of its acknowledgment
before a notary public. Hence, it enjoys the presumption of
regularity, which can only be overcome by clear and convincing
evidence. Thus, in Spouses Santos v. Spouses Lumbao,   this42
Court upheld the presumption of regularity, finding the bare denial
of petitioners therein insufficient to overcome the same:
Furthermore, both "Bilihan ng Lupa" documents dated 17 August
1979 and 9 January 1981 were duly notarized before a notary
public. It is well-settled that a document acknowledged before
a notary public is a public document that enjoys the
presumption of regularity. It is a prima facie evidence of the
truth of the facts stated therein and a conclusive
presumption of its existence and due execution. To
overcome this presumption, there must be presented
evidence that is clear and convincing. Absent such evidence,
the presumption must be upheld. In addition, one who denies
the due execution of a deed where one's signature appears has
the burden of proving that contrary to the recital in the jurat, one
never appeared before the notary public and acknowledged the
deed to be a voluntary act. Nonetheless, in the present
case petitioners' denials without clear and convincing
evidence to support their claim of fraud and falsity were not
sufficient to overthrow the above-mentioned
presumption; hence, the authenticity, due execution and the
truth of the facts stated in the aforesaid "Bilihan ng Lupa" are
upheld.  (Emphasis and underscoring supplied; citations omitted)
43
While Petitioners vehemently deny participation in the execution
of the Deed of Undertaking, they did not present any evidence to
support their claim that their signatures thereon were forged.
Hence, consistent with the ruling of the RTC and CA, the Court
upholds the presumption of regularity ascribed to the Deed of
Undertaking.
Petitioners ' claim that they are
accommodation borrowers is
supported by sufficient evidence.
Petitioners claim that they are mere accommodation borrowers
who applied for the DBP Loan for and on behalf of the Joint
Venturers, in furtherance of the verbal agreement between and
among petitioner Marcelian and the Joint Venturers. Thus,
Petitioners aver that the liability arising from the non-payment of
the DBP Loan should be assumed not by Petitioners Marcelian
and Alice, but by Petitioner Marcelian and the rest of the Joint
Venturers - Clark, Mario Delos Reyes and Richard Sevilla. 44
To support this claim, Petitioners rely on the Joint Affidavit
executed by two (2) of the alleged Joint Venturers - Mario Delos
Reyes and Richard Sevilla,  the pertinent portions of which read:
45
1. That we entered into a business venture with Atty. Marcelian C.
Tapayan and Clark Martinez, engaging in the construction
business;
82
2. That the loan obtained by Atty. Marcelian [T]apayan and Mr.
Clark Martinez for Pl Million from DBP, Ozamiz City, was used
partly to liquidate the loan of Mrs. Ponceda Martinez for about
P65 thousand and the balance was used to finance as additional
capital in the construction business [.]
46
Curiously, however, only Mario Delos Reyes testified before the
RTC to affirm the statements in the Joint Affidavit, as Richard
Sevilla had allegedly fled to the United States as an
undocumented alien. 47
Hence, apart from the statements in the Joint Affidavit affirmed
solely by the testimony of Mario Delos Reyes, which is in turn
corroborated only by petitioner Marcelian's self-serving
declarations, the Court finds no other evidence on record to
support the existence of the alleged joint venture, and the verbal
agreement of the Joint Venturers in respect of the DBP Loan.
In fact, the theory that Petitioners acted as mere accommodation
borrowers is belied by their own allegations respecting the
payment of fees relating to the DBP Loan, which the Court quotes
hereunder:
[P]etitioner Marcelian Tapayan endeavored in good faith to fully
pay the interests and fees of the Pl Million loan with the DBP,
Ozamiz City.  The loan is in the nature of a one-year credit line
1avvphi1
drawable against 60 to 150-day promissory notes, and is
renewable yearly as long as the interests were paid. The first
release of the loan was on December 27, 1996 via a promissory
note 96/109 for P400,000.00 for 150 days (Exhibit "6") which was
extended for another 150 days via an Addendum to Promissory
Note (Exh "7"). The second release was on February 4, 1997 via
Promissory Note No. 97-010 for P600,000.00 (Exh "8") for a term
of 150 days extended for another 150 days via an Addendum to
Promissory Note (Exh "9"). The admitted documentary exhibits
of petitioners evidently show that the interests and other
fees (doc. stamps) were fully paid by petitioners covering the
period from the date of the first loan release on December
27, 1996 and until the date of the extensions and even
beyond the one-year term of the credit line as interests were
paid up to February 28, 1998 as per Exhibits "10" to "27".
Further, petitioners also paid the premium on the insurance
coverage of the mortgaged property from May 15, 1997 to
May 15, 1998, and in anticipation of the renewal of the credit
line, petitioners also paid the insurance premium covering
the period from May 15, 1998 to May 15, 1999, as can be
gleaned from Exhibits "28" to "31". The foregoing facts
sufficiently indicated that amid the hard times, petitioners were
up-to-date in the payments of interests and fees covering the
promissory notes and extensions (Exhs. "6" to "9"), which is a
basic requirement in the consideration of the renewal of the credit
line. In sum, petitioners exercised utmost good faith in complying
with the terms and conditions of the credit line.  (Emphasis
48
supplied)
Petitioners' payment of the interest on the DBP Loan, the
insurance premiums corresponding to the Pingol Property, and
other incidental fees solely on their account,  without seeking
49
reimbursement from the alleged Joint Venturers, establishes
Petitioners' direct interest in the DBP Loan, and negates the claim
that they are mere accommodation borrowers. Since the
proceeds of the DBP Loan redounded to Petitioners' benefit, they
must bear the liability arising from its non-payment, and comply
with the obligations imposed by the Deed of Undertaking
executed in connection therewith.
The amount paid to PNB must be
deducted from Petitioners' total liability
in accordance with the provisions of the
Deed.
Petitioners aver that the RTC's determination respecting the
amount due Respondent is erroneous, since it failed to consider
the deductions stipulated in the Deed of Undertaking. Hence,
Petitioners submit that should the Court order the execution of a
mortgage over the Carangan Property, such mortgage should
83
only be made to secure the amount of One Million One Hundred
Fourteen Thousand Eight Hundred Seventy-Nine Pesos and
55/100 (₱1,114,879.55),  which represents the amount paid by
49-a
Respondent to DBP to avert the foreclosure of the DBP
Mortgage, net of the deductions stipulated in the Deed of
Undertaking.
The Court agrees.
The RTC Decision directed Petitioners to execute a mortgage in
favor of Respondent to secure the amount of One Million One
Hundred Eighty Thousand Two Hundred Pesos and 10/100
(₱1,180,200.10), unless Petitioners reimburse Respondent said
amount in full.
In so ruling, the RTC completely disregarded the fourth paragraph
of the Deed of Undertaking, which specifically requires
Respondent to deduct all prior payments made in favor of PNB
from Petitioners' total liability, thus:
That in the event the First Party could not pay the loan and
consequently, the property of the Second Party is foreclosed and
is not redeemed by the First Party with[ in] the one (1) year
redemption period; or in case the loan shall be paid by the
Second Party just to save the property from being foreclosed, the
First Party shall acknowledge as his indebtedness the
amount due to the Development Bank of the Philippines
upon foreclosure or the amount paid by the Second Party in
paying the loan, but in either case shall be deducted
therefrom the amount of P65,320.55 plus interests and fees
paid by the First [P]arty to PNB, Ozamiz City[.]  (Emphasis
50
supplied)
This oversight was adopted by the CA when it affirmed the RTC
Decision in toto. The Court now corrects this error.
Respondent anchors her cause of action on the Deed of
Undertaking in its entirety. To allow Respondent to selectively
invoke the validity and enforceability of the provisions that support
her cause, and disregard those that operate against her interests
would promote injustice at the expense of Petitioners.
Notably, Respondent does not deny that a portion of the DBP
Loan was in fact utilized to settle part of her PNB
Loan.  Respondent merely avers that such payment was
1âwphi1
necessary to clear the title of the Pingol Property, and that the
resolution of such issue would be inconsequential to the ultimate
disposition of the assailed Decision:
Grounds 2 and 3 relied upon by [P]etitioners raise questions of
fact so insubstantial that they do not affect the ultimate disposition
of the action that [P]etitioners execute a mortgage on their
propert[y] in favor of [R]espondent. It is an admitted fact x x x that
[R]espondent obtained a One Million Peso bank loan as capital
for [P]etitioners' construction business. If [P]etitioners needed to
clear [R]espondent's title of an existing minor lien to be able to
use it for their purpose, expenses incurred for the process were
par for the course. 51
WHEREFORE, premises considered, the Petition for Review
is GRANTED IN PART. The Decision dated May 30, 2013 of the
Court of Appeals in CA-G.R. CV No. 02081-MIN is
hereby AFFIRMED WITH MODIFICATION. Petitioners Marcelian
and Alice Tapayan are directed to execute a mortgage on their
house and lot covered by TCT No. T-10143 located at Carangan,
Ozamiz City in favor of Respondent Ponceda Martinez, unless
they reimburse the latter the amount of One Million One Hundred
Fourteen Thousand Eight Hundred Seventy-Nine Pesos and
55/100 (₱1,114,879.55). Petitioners are likewise directed to pay
Respondent attorney's fees in the amount of Twenty Thousand
Pesos (₱20,000.00), in accordance with the Decision dated
September 28, 2009 rendered by the Regional Trial Court in Civil
Case No. OZC-99-38.
SO ORDERED.

This argument is specious, as the actual amount Petitioners are

bound to reimburse constitutes the very same obligation
Respondent seeks to secure through the execution of the
mortgage subject of this dispute.

Thus, the Court modifies the assailed Decision, and rules that
Sixty-Five Thousand Three Hundred Twenty Pesos and 55/100
(₱65,320.55) should be deducted from Petitioners' total liability,
representing the reimbursement to be paid by the latter to
PNB.  Consequently, the amount Petitioners should reimburse to
52

Respondent is One Million One Hundred Fourteen Thousand

Eight Hundred Seventy-Nine Pesos and 55/100 (₱1,114,879.55).

84
 DEL ROSARIO, and HEIRS OF SANTOS DEL
ROSARIO, respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 to set aside the Decision2 dated 25

September 2000 and the Resolution dated 29 December 2000 of
the Court of Appeals in CA-G.R. CV No. 43929. The Court of
Appeals reversed the Decision3dated 7 July 1993 of the Regional
Trial Court of Bulacan, Branch 8, Malolos ("trial court") in Civil
Case No. 70-M-92.

The Facts

On 14 February 1992, respondents Julia Del Rosario, Maria Del

Rosario, Pacencia Del Rosario and the Heirs of Santos Del
Rosario ("respondents") filed before the trial court a complaint for
Recovery of Possession against petitioner Department of
Education, Culture and Sports ("DECS"). Respondents alleged
that they own a parcel of land with an area of 1,181 square
meters ("Property") situated in Kaypombo,4 Sta. Maria, Bulacan.
The Property was registered in 1976 in the name of respondents
under Transfer Certificate of Title No. T-222432 of the Bulacan
Register of Deeds. Respondents alleged that the Kaypombo
Primary School Annex ("KPPS") under DECS was occupying a
portion of the Property through respondents’ tolerance and that of
their predecessors-in-interest. Respondents further alleged that
15. G.R. No. 146586             January 26, 2005 KPPS refused to vacate the premises despite their valid demands
to do so.
DEPARTMENT OF EDUCATION CULTURE and
SPORTS, petitioner,  In its Answer, DECS countered that KPPS’s occupation of a
vs.  portion of the Property was with the express consent and
JULIA DEL ROSARIO, MARIA DEL ROSARIO, PACENCIA approval of respondents’ father, the late Isaias Del Rosario

85
("Isaias"). DECS claimed that some time in 1959 Isaias donated a
portion ("Donated Site") of the Property to the Municipality of Sta.
Maria ("Municipality") for school site purposes. Atty. Ely Natividad,
now a regional trial court judge ("Judge Natividad"), prepared the
deed of donation and the acceptance. KPPS started occupying
the Donated Site in 1962. At present, KPPS caters to the primary
educational needs of approximately 60 children between the ages
of 6 and 8. Because of the donation, DECS now claims
ownership of the 650 square meter Donated Site. In fact, DECS
renamed the school the Isaias Del Rosario Primary School.
During the pre-trial conference held on 3 September 1992, DECS
admitted the existence and execution of TCT No. T-222432
(Exhibit "A"), Tax Declaration No. 6310 (Exhibit "B"), and the tax
receipts in respondents’ names for the years 1991 and 1992
(Exhibits "B-1" and "B-2"). On the other hand, respondents
admitted the existence of Judge Natividad’s affidavit that he
prepared the deed of donation (Exhibit "1") and the tax
declaration for 1985 in the Municipality’s name (Exhibit "2"). Since
there was no dispute that the Property was registered in
respondents’ names, the parties agreed to a reverse trial with
DECS presenting its evidence first to prove that there was a valid
donation to the Municipality.
DECS presented three witnesses: Ricardo Nicolas, Vidal De
Jesus and Judge Natividad, all residents of Kaypombo, Sta.
Maria, Bulacan. The trial court summarized the witnesses’
testimonies, thus:
Defendant, represented by the Office of the Solicitor General,
proceeded to present as its first witness, Ricardo Nicolas, 78
years old, widower, housekeeper and residing at [K]aypombo,
Sta. Maria, Bulacan, since 1953 up to the present. He testified
that during the duration of his residency in [K]aypombo, he came
across a public elementary school (KPPS); that as far as he
knows, the land occupied by the primary school was formerly
owned by Isaias del Rosario who donated said land to the people
of Sta. Maria, Bulacan in 1959; that the act of donating said land
86
was made during a political meeting in his residence by Isaias del
Rosario and in the presence of the then incumbent mayor; he
actually saw Isaias del Rosario and Mayor Ramos sign a
document which is a deed of donation in favor of the Municipality
of Sta. Maria; that the signing was made in the presence of Judge
Natividad who was then a municipal councilor; that Isaias del
Rosario is now dead but his death occurred long after the
construction of the KPPS and that Isaias del Rosario even
witnessed the construction of the primary school.
Vidal de Jesus, the second witness for the defense, 65 years old,
married, a barangay councilman of Kaypombo, Sta. Maria,
Bulacan, and presently residing at No. 437 Kaypombo, Sta.
Maria, Bulacan, testified that as barangay councilman, he was
aware of the land problem of KPPS; that in 1991, the barangay
council and the children of Isaias del Rosario had a meeting in
the presence of Judge Natividad, during which, the latter told the
children of Isaias del Rosario that the land had been donated by
their father. The children agreed but requested that the school be
renamed after their father’s name; that the barangay council tried
to secure a copy of the deed of donation from the Municipality of
Sta. Maria, but according to the people at the municipal hall,
when they transferred to the new municipal building, the deed got
lost, only they were able to get a copy of the tax declaration in the
name of the municipality of Sta. Maria, Bulacan (Exh. "2"), a
certification to that effect was issued by the municipal mayor
(Exh. "3"). They went to the DECS office in Malolos, but could not
likewise find a copy of the deed.
The last witness for the defense was Judge Eli Natividad, 63
years old, widower, resident of Kaypombo, Sta. Maria, Bulacan.
He testified that KPPS is very near his house; that the land
occupied by said school is formerly owned by Isaias del Rosario,
a close relative; that as far as he knows, the municipality of Sta.
Maria is now the owner of the land; that when he was still one of
the incumbent municipal councilors of Sta. Maria in 1961, his
relative Isaias del Rosario went to his house and told him that he
wanted to have a primary school in their place as he saw the
plight of small pupils in their place; that the elementary school
then existing was very far from their place and Isaias del Rosario
wanted to have a primary school to help these pupils; that Isaias
del Rosario was willing to donate a portion of the questioned lot
for school site, so that said matter was relayed to the municipal
council; he also testified that he prepared the deed of donation
which was signed by Isaias del Rosario in his residence which
was accepted by the municipality of Sta. Maria, Bulacan through
a resolution signed in the office of the secretary and the municipal
mayor; that a copy of said resolution could not be found due to
the transfer of the municipal hall from the old to the new building.5
Respondents presented two witnesses: Eugenia R. Ignacio and
Maria Del Rosario-Esteban, daughters of the late Isaias. The trial
court summarized their testimonies, as follows:
For the plaintiffs, Eugenia R. Ignacio, 59, residing at Kaypombo,
Sta. Maria, Bulacan testified that she knows the plaintiffs as they
are her brothers/sisters; that their father Isaias del Rosario died
on April 18, 1966 long after the construction of the school and
that she does not know everything about the donation because
her father never informed them of his dealings and she did not
inquire from him about the occupancy of the lot by the school.
Maria del Rosario-Esteban, 66, residing at Pulang-lupa, Pandi,
one of the plaintiffs herein, testified that she knows the property in
question and that they own it by virtue of succession and that she
cannot recall how the school was constructed on the land; that
her parents never donated any property because that is their only
property. Also, she stated that their father told them that he just
lent the property temporarily to the municipality and she never
found any document conveying the lot in question to the
municipality of Sta. Maria, Bulacan.6
On 7 July 1993, the trial court rendered judgment dismissing
respondents’ complaint for recovery of possession as follows:
87
WHEREFORE, based on the foregoing premises, and for a much
greater cause, the instituted complaint, for recovery of possession
of 1,181 square meters of land in Kaypombo, Sta. Maria,
Bulacan, covered by TCT No. T-222432 against the defendant is
hereby DISMISSED without costs.7
The trial court explained its decision in this wise:
After a careful consideration of the facts at hand, taking into
account the credibility and reasonableness of the testimonies of
the witnesses, the court is of the opinion that the defense was
able to prove the due execution of the deed of donation and its
acceptance, as well as the loss of the same, in accordance with
Rule 130[,] Sec. 4. It is recalled that Judge Eli Natividad, then a
municipal councilor of Sta. Maria, testified that he was the person
who prepared the deed of donation and later notarized the same,
and that said deed was duly executed and signed before him and
in his presence. Likewise, he affirmed that the municipal board of
Sta. Maria, Bulacan, passed a resolution accepting the deed of
donation in favor of the said municipality. Noteworthy is the rule
that a recantation/recollection of witness is a form of secondary
evidence to prove the existence/content of a document. Since the
loss of the deed subject matter of this case was likewise duly
proved by the defense, exerting the best possible efforts to locate
or secure a copy of the same and without bad faith on its part,
this Court is bent to give a greater weight to the secondary
evidence adduced by the defense vis-à-vis the title in the name of
the plaintiff[s], most particularly in this case, where the plaintiffs
failed to make it appear that other and more secondary evidence
is known to the defendant and can be produced by them.
Further judging on the consistency, credibility and personality of
the witnesses of the defense, notably Judge Eli Natividad who
was then a municipal councilor of Sta. Maria at the time of the
execution of the deed of donation and who is thus in a best
position to testify on the matter, not to mention the fact that their
testimonies were all under oath, the Court cannot avoid but give
weight to their statements and declarations. The defense
witnesses were not induced by ill motive to testify in favor of the
DECS, considering that they will not derive any personal benefit,
material or otherwise, from such an act. On the contrary, such act
may be considered heroic, as it is a manifestation of a moral
compulsion to help shed light to the truth.
On the part of the plaintiffs, it was testified to by Eugenia Ignacio
that their father (donor) died on April 18, 1966, long after the
school was constructed on the subject land with the occupation of
the land by the school which continued up to the present, and
even after the land was allegedly transferred by succession to the
plaintiffs in 1976, it was only now that it comes to the mind of the
plaintiffs to seek recovery of the possession of the same. This,
among other things, may be taken to favor the stand of the
defense that the land occupied by the school was in truth,
donated to the municipality of Sta. Maria.8
Respondents appealed to the Court of Appeals. On 25
September 2000, the Court of Appeals rendered judgment as
follows:
WHEREFORE, premises considered, the appealed decision is
REVERSED and another one entered ordering the defendant to
vacate the subject premises.9
The appellate court denied DECS’ motion for reconsideration in
the Resolution dated 29 December 2000. Hence, this petition.
The Court of Appeals’ Ruling
The Court of Appeals held that DECS failed to prove the
existence and due execution of the deed of donation as well as
the Resolution of the municipal council accepting the donation.
The Court of Appeals was not fully satisfied that DECS or the
Municipality had made a diligent search of the alleged "lost" deed
of donation. Pertinent portions of the Court of Appeals’ Decision
read:
88
It is unfortunate that the Deed of Donation and the Resolution
were not produced during the trial. The defendant alleged that
these were lost when the Municipality transferred to a new
building. The defendant resorted to proving the documents’
existence through Sec. 5 of Rule 130 (B) of the Revised Rules on
Evidence by relying on the testimony of the witnesses who were
present during the execution of the lost documents. xxx. 
xxx
The Court disagrees with the ruling of the lower court to the effect
that the defendant was able to satisfy the foregoing requisites.
The defense was not able to prove the due execution or
existence of the deed of donation and the resolution, as well as
the loss of these documents as the cause of their unavailability.
The Rule requires that the defendant must "prove its contents by
a copy, or by a recital of its contents in some authentic document,
or by the testimony of the witnesses in the order stated".
However, the defendant proceeded with the last resort-testimony
of the witnesses, without even showing any diligent effort to
secure a copy of the deed of donation and the resolution. Note
that Atty. Eli Natividad, then a municipal councilor of Sta. Maria,
testified that he was the person who prepared the deed of
donation and later notarized the same. He also affirmed that the
municipal board of Sta. Maria, Bulacan passed a Resolution as
he was a municipal councilor at that time such resolution was
passed. He testified that he furnished the municipal government,
the Division Office of Education in Bulacan, the court of Sta.
Maria a copy of the deed. However, the defendant only submitted
an affidavit showing that the deed can no longer be located in the
municipal government. There was no evidence to show that the
defendant looked for a copy from the Clerk of Court of Sta. Maria,
Bulacan. If it is true that Atty. Natividad notarized the deed, he
should have a copy of it. In fact, such act of notarizing the deed
should have been in his notarial register. This notarial register
was supposed to be forwarded to the Clerk of Court of the Court
of First Instance of the province and later, to the Chief of the
National Library.
"Before secondary evidence of a writing may be introduced on the
ground that the instrument has been lost there must be proof that
a diligent search has been made in the place where it is most
likely to be found and that the search has not been successful."
In the case at bar, this Court is not fully satisfied that a search
was made or that there was diligence in the search. The lower
court erred in hastily concluding that the loss of the document
was sufficiently established when in fact, the defendant did not
look for it in the office of the Clerk of Court and the National
Library. Since there was no diligent search, this Court finds it hard
to believe the defendant’s theory that such documents existed
because, for sure, if there really was a notarized deed or a
resolution, there must be a copy.
"Secondary evidence of the contents of writings is admitted upon
the theory that the original cannot be produced by the party by
whom the evidence is offered within a reasonable time by the
exercise of reasonable diligence. Until, however, the non-
production of the primary evidence has been sufficiently
accounted for, secondary evidence is not ordinarily admissible."
For this Court to affirm the ruling of the lower court based on
testimonies alone will work injustice to the plaintiffs.10
The Issue
In its memorandum, DECS raises the sole issue of –
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONER FAILED TO PROVE THE DUE
EXECUTION OR EXISTENCE OF THE DEED OF DONATION
AND THE RESOLUTION OF THE MUNICIPAL COUNCIL
ACCEPTING THE DONATION, AS WELL AS THE LOSS OF
89
THE DOCUMENTS AS THE CAUSE OF THEIR
UNAVAILABILITY.11
The Solicitor General contends that DECS had satisfactorily
proven by secondary evidence the fact of donation, the existence
and due execution of the deed of donation as well as the
municipal council Resolution accepting the donation. DECS had
also adequately proven the loss of these documents. According
to the Solicitor General, based on the evidence presented in the
trial court, DECS established that Isaias donated a parcel of land
to the Municipality as the site of a school. Isaias executed a deed
of donation, which then Atty. Eli Natividad notarized. There was a
municipal council Resolution accepting the donation and
expressing gratitude to Isaias. There was notice of this
acceptance as DECS constructed the school on the Donated Site
during the lifetime of the donor, without objection on his part.
Since all the essential formalities had been followed, the donation
made by Isaias long after the death of his wife Nieves Gumatay is
valid and proven by secondary evidence.
The Court’s Ruling
The petition lacks merit.
Formal Requisites of Donations of Real Property
The donation of real property, which is a solemn contract, is void
without the formalities stated in Article 749 of the Civil Code of the
Philippines ("Civil Code"). Article 749 of the Civil Code reads:
Art. 749. In order that the donation of an immovable may be valid,
it must be made in a public document, specifying therein the
property donated and the value of the charges which the donee
must satisfy.
The acceptance may be made in the same deed of donation or in
a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor
shall be notified thereof in an authentic form, and this step shall
be noted in both instruments.
Article 749 of the Civil Code requires that the donation of real
property must be made in a public instrument. Otherwise, the
donation is void. A deed of donation acknowledged before a
notary public is a public document.12The notary public shall certify
that he knows the person acknowledging the instrument and that
such person is the same person who executed the instrument,
acknowledging that the instrument is his free act and deed. The
acceptance may be made in the same deed of donation or in a
separate instrument. An acceptance made in a separate
instrument must also be in a public document. If the acceptance
is in a separate public instrument, the donor shall be notified in
writing of such fact. Both instruments must state the fact of such
notification.13
Best and Secondary Evidence
The best or primary evidence of a donation of real property is an
authentic copy of the deed of donation with all the formalities
required by Article 749 of the Civil Code. The duty to produce the
original document arises when the subject of the inquiry are the
contents of the writing in which case there can be no evidence of
the contents of the writing other than the writing itself. Simply put,
when a party wants to prove the contents of the document, the
best evidence is the original writing itself.
A party may prove the donation by other competent or secondary
evidence under the exceptions in Section 3, Rule 130 of the
Revised Rules on Evidence. Section 3 reads:
90
SEC. 3. Original document must be produced; exceptions. –
When the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document
itself, except in the following cases:
(a) When the original has been lost or destroyed, or
cannot be produced in court, without bad faith on the part
of the offeror;
(b) xxx;
(c) xxx;
(d) xxx. 
In relation to this, Section 5 of Rule 130 reads:
SEC. 5. When original document is unavailable. – 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.
Secondary evidence of the contents of a document refers to
evidence other than the original document itself.14 A party may
introduce secondary evidence of the contents of a written
instrument not only when the original is lost or destroyed, but also
when it cannot be produced in court, provided there is no bad
faith on the part of the offeror. However, a party must first
satisfactorily explain the loss of the best or primary evidence
before he can resort to secondary evidence. A party must first
present to the court proof of loss or other satisfactory explanation
for non-production of the original instrument. The correct order of
proof is as follows: existence, execution, loss, contents, although
the court in its discretion may change this order if necessary.15
The testimony of Ricardo Nicolas may have established to some
extent the existence of the deed of donation since he testified that
he was present when Isaias and the mayor talked about the
donation and that he witnessed the signing of the
document.  However, Ricardo Nicolas admitted during cross-
1a\^/phi1.net
examination that he did not read and did not have personal
knowledge of the contents of the document that Isaias and the
mayor supposedly signed.16
In the same vein, Vidal De Jesus’ testimony does not help to
establish the deed of donation’s existence,
executionand contents. He testified that he never saw the deed of
donation. On cross-examination, Vidal De Jesus admitted that the
information that Isaias donated the lot to the Municipality was only
relayed to him by Judge Natividad himself.17 If at all, DECS
offered Vidal De Jesus’ testimony to establish the loss of the
deed of donation. Vidal de Jesus testified that the barangay
council tried to get a copy of the deed but the Municipality
informed the barangay council that the deed was lost when the
municipal office was transferred to a new building. DECS also
made a search in the DECS office in Malolos but this proved futile
too.
This leaves us with Judge Natividad’s testimony. Judge Natividad
testified that he prepared and notarized the deed of donation. He
further testified that there was a municipal council Resolution,
signed in the Office of the Secretary and of the Mayor, accepting
the donation and expressing gratitude to the donor. He furnished
the municipal government, the DECS Division Office of Bulacan
and the clerk of court of Sta. Maria a copy of the deed of
donation.
DECS did not introduce in evidence the municipal council
Resolution accepting the donation. There is also no proof that the
donee communicated in writing its acceptance to the donor aside
from the circumstance that DECS constructed the school during
Isaias’ lifetime without objection on his part. There is absolutely
no showing that these steps were noted in both instruments.
91
Sufficiency of Proof of Loss
What mainly militates against DECS’ claim is, as the Court of
Appeals found, inadequate proof that DECS or the Municipality
made a diligent search in the places where the deed of donation
may likely be found and that the search was unsuccessful. Prior
to the introduction of secondary evidence, a party must establish
the existence and due execution of the instrument. After a party
establishes the existence and due execution of the document, he
must prove that the document was lost or destroyed.18 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, on 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.19
Here, DECS allegedly made a search in the municipal building
and in the DECS Division Office in Bulacan. The copies of the
deed of donation furnished these offices were purportedly "lost"
when these offices transferred to new locations. However, as the
Court of Appeals correctly pointed out, Judge Natividad who
claimed to have notarized the deed of donation failed to account
for other copies of the deed, which the law strictly enjoins him to
record, and furnish to other designated government offices.
The Notarial Law is explicit on the obligations and duties of a
notary public. The law requires him to keep a notarial register
where he shall record all his official acts as notary public. The law
specifies the information that the notary public must enter in the
notarial register. Failure to perform this duty results in the
revocation of his commission as notary public. We quote the
provisions of the Notarial Law pertinent to the case:
SECTION 245. Notarial register. - Every notary public shall keep
a register to be known as the notarial register, wherein record
shall be made of all his official acts as notary; and he shall supply
a certified copy of such record, or any part thereof, to any person
applying for it and paying the legal fees therefor.
1ªvvphi1.nét
Such register shall be kept in books to be furnished by the
Attorney-General (Solicitor-General) to any notary public upon
request and upon payment of the actual cost thereof, but officers
exercising the functions of notaries public ex officio shall be
supplied with the register at government expense. The register
shall be duly paged, and on the first page, the Attorney-General
(Solicitor-General) shall certify the number of pages of which the
book consist[s].
SECTION 246. Matters to be entered therein. - The notary public
shall enter in such register, in chronological order, the nature of
each instrument executed, sworn to, or acknowledged before
him, the person executing, swearing to, or acknowledging the
instrument, the witnesses, if any, to the signature, the date of the
execution, oath, or acknowledgment or the instrument, the fees
collected by him for his services as notary in connection
therewith, and; when the instrument is contract, he shall keep
a correct copy thereof as part of his records, and shall
likewise enter in said records a brief description of the substance
thereof, and shall give to each entry a consecutive number,
beginning with number one in each calendar year. The notary
shall give to each instrument executed, sworn to, or
acknowledged before him a number corresponding to the one in
his register, and shall also state on the instrument the page or
pages of his register on which the same is recorded. No blank
line shall be left between entries.
xxx
At the end of each week the notary shall certify in his register the
number of instruments executed, sworn to, acknowledged, or
92
protested before him; or if none, such certificate shall show this
fact.
A certified copy of each month’s entries as described in this
section and a certified copy of any instrument acknowledged
before them shall within the first ten days of the month next
following be forwarded by the notaries public to the clerk of
the Court of First Instance of the province and shall be filed
under the responsibility of such officer; Provided, that if there is
no entry to certify for the month, the notary shall forward a
statement to this effect in lieu of the certified copies herein
required. (As amended by C.A. 72, Sec. 1.)
SECTION 247. Disposition of notarial register. - Immediately
upon his notarial register being filled, and also within fifteen
days after the expiration of his commission, unless
reappointed, the notary public shall forward his notarial
register to the clerk of the Court of First Instance of the
province or of the City of Manila, as the case may be, wherein
he exercises his office, who shall examine the same and report
thereon to the judge of the Court of First Instance. If the judge
finds that no irregularity has been committed in the keeping of the
register, he shall forward the same to the chief of the division
of archives, patents, copyrights, and trade-marks. In case the
judge finds that irregularities have been committed in the keeping
of the register, he shall refer the matter to the fiscal of the
province - and in the City of Manila, to the fiscal of the city - for
action and the sending of the register to the chief of the division of
archives, patents, copyrights, and trade-marks shall be deferred
until the termination of the case against the notary public.
(Emphasis and underscoring supplied)
The Notarial Law mandates a notary public to record in his
notarial register the necessary information regarding the
instrument acknowledged before him. The Notarial Law also
mandates the notary public to retain a copy of the instrument
acknowledged before him when it is a contract.20 The notarial
register is a record of the notary public’s official acts.
Acknowledged instruments recorded in the notarial register are Appeals. We cannot grant the relief DECS is seeking and
public documents.21 If the instrument is not recorded in the disregard existing laws and jurisprudence. DECS, however, is not
notarial register and there is no copy in the notarial records, the without remedy. The government can expropriate at any time the
presumption arises that the document was not notarized and is Donated Site, paying just compensation to respondents.
not a public document.22
WHEREFORE, we DENY the petition. The Decision dated 25
DECS should have produced at the trial the notarial register September 2000 and the Resolution dated 29 December 2000 of
where Judge Natividad as the notary public should have recorded the Court of Appeals in CA-G.R. CV No. 43929 are AFFIRMED.
the deed of donation. Alternatively, DECS should have explained
the unavailability of the notarial register. Judge Natividad could SO ORDERED.
have also explained why he did not retain a copy of the deed of
donation as required by law. As the Court of Appeals correctly
observed, there was no evidence showing that DECS looked for a
copy from the Clerk of Court concerned or from the National
Archives. All told, these circumstances preclude a finding that
DECS or the Municipality made a diligent search to obtain a copy
of the deed of donation.

In civil cases, the party having the burden of proof must establish
his case by a preponderance of evidence. "Preponderance of
evidence" means that the evidence as a whole adduced by one
side is superior to that of the other. In other words,
preponderance of evidence means the greater weight of the
evidence - or evidence that outweighs the evidence of the
adverse party. This Court is not satisfied that the evidence on the
side of the party carrying the burden of proof is of preponderating
weight.

Finally, DECS raises for the first time before this Court the issue
on whether respondents’ claim is barred by the equitable defense
of laches. DECS did not raise this matter in the complaint or
during the trial in the court below. DECS did not also raise this
matter in its appeal to the Court of Appeals.  This Court cannot
l^vvphi1.net

entertain this issue at this late stage, for to do so would plainly

violate the basic rule of fair play, justice and due process.23

Much as we sympathize with the plight of the schoolchildren, we

do not find reversible error in the Decision of the Court of

93
 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 plaintiff’s (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 petitioner’s 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 petitioner’s
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
16. G.R. No. 170491             April 4, 2007 Shipping, Inc. filed a Motion to Dismiss which was subsequently
denied by public respondent Judge in an Order dated 20 October
NATIONAL POWER CORPORATION, Petitioner,  1998. Bangpai Shipping Co. likewise filed a Motion to Dismiss
vs.

94
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 petitioner’s formal offer of evidence.
On 16 November 2004, public respondent judge issued the
assailed order denying the admission and excluding from the
records petitioner’s 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. 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 Wallem’s 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
95
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, plaintiff’s 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 petitioner’s 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 sub-markings, "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 petitioner’s 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 petitioner’s 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
96
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 petitioner’s
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 non-
presentation 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
judge’s 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.  Virgilio Asprer;
97
The focal point of this entire controversy is petitioner’s 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 section’s 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 petitioner’s power barges 207 and 209
prepared by Hopewell Mobile Power Systems Corporation
and manually signed by Messrs. Rex Malaluan and
 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
98
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 person’s
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 petitioner’s
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". 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
99
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.9The 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 to blame for the respondent judge’s denial of admission of its
cannot be produced in court, the offeror, upon proof of its aforementioned documentary evidence and consequently, the
execution or existence and the cause of its unavailability without denial of its prayer to be given another opportunity to present the
bad faith on his part, may prove its contents by a copy, or by a originals of the documents that were denied admission nor to lay
recital of its contents in some authentic document, or by the the predicate for the admission of secondary evidence in case the
testimony of witnesses in the order stated.11 The offeror of same has been lost.
secondary evidence is burdened to prove the predicates thereof:
(a) the loss or destruction of the original without bad faith on the WHEREFORE, premises considered, the instant petition is
part of the proponent/offeror which can be shown by hereby DENIED. The Decision of the Court of Appeals in CA-G.R.
circumstantial evidence of routine practices of destruction of CEB-SP No. 00848, dated 9 November 2005 is hereby
documents;12 (b) the proponent must prove by a fair AFFIRMED. Costs against petitioner.
preponderance of evidence as to raise a reasonable inference of
the loss or destruction of the original copy; and (c) it must be SO ORDERED.
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 petitioner’s
intransigence, the merits of petitioner’s 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

100
 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

17. G.R. No. 170633             October 17, 2007 Forma Invoice No. ST2-POSTSO40112 containing the terms and
conditions of the transaction. MCC sent back by fax to
Ssangyong the invoice bearing the conformity signature13 of

101
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. ST2-POSTS0401-117 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
102
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, ST2-
POSTS0401-1 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.  POSTS0401-2.
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. ST2-POSTS080-1, 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,39Ssangyong alleged that defendants
breached their contract when they refused to open the L/C in the
103
amount of US$170,000.00 for the remaining 100MT of steel
under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-
 
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
104
WITH REFERENCE NOS. ST2-
POSTS0401-1 AND ST2-POSTS0401-2.
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.  raising the following arguments: that the CA decision dated 15
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 ST2-POSTSO401-2, 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.
105
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,
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 formamotion; 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.
-I-
It 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
106
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.
107
- 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-à-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 ST2-POSTS0401-2) 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'.
108
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
109
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?  electronic data interchange (EDI), electronic mail, telegram, telex
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
110
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,
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.  as follows:
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.
111
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
"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
112
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 Defensor-Santiago 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
113
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.  It is, at best, an exact copy preserving all the marks of an
Facsimile transmissions are not, in this sense, "paperless," but
verily are paper-based.  genuine and authentic and was originally signed by the
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 image—
dividing 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.,86where 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
114
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.
original. Without the original, there is no way of
determining on its face whether the facsimile pleading is
party and his counsel. It may, in fact, be a sham
pleading.87
Accordingly, in an ordinary facsimile transmission, there exists an
original paper-based 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 issuance—an
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
115
(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 transmissioncannot 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 ST2-POSTS0401-2 (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 faxed by defendants to plaintiff an irrevocable letter of
opposition to it.96 showing the printed plaintiff, among other co
transmission details on the
In general, contracts are perfected by mere consent,97 which is upper portion of said paper as
manifested by the meeting of the offer and the acceptance upon coming from defendant MCC
the thing and the cause which are to constitute the contract. The on 26 Apr 00 08:41AM
offer must be certain and the acceptance absolute.98 They are, E-2 Conforme signature of Mr. To show that defendan
moreover, obligatory in whatever form they may have been Gregory Chan, contained in confirmation of the (i) d
entered into, provided all the essential requisites for their validity facsimile/thermal paper faxed total of 220MT specified
are present.99 Sale, being a consensual contract, follows the by defendants to plaintiff products, (ii) defendant
general rule that it is perfected at the moment there is a meeting showing the printed thereof by way of an irr
of the minds upon the thing which is the object of the contract and transmission details on the credit in favor of plaintif
upon the price. From that moment, the parties may reciprocally upper portion of said paper as conditions.
demand performance, subject to the provisions of the law coming from defendant MCC
governing the form of contracts.100 on 26 Apr 00 08:41AM
F Pro forma Invoice dated 17 To show that defendan
The essential elements of a contract of sale are (1) consent or
April 2000 with Contract with plaintiff for delivery
meeting of the minds, that is, to transfer ownership in exchange
No. ST2-POSTSO401-2, photo MT of stainless steel fro
for the price, (2) object certain which is the subject matter of the
copy payable by way of an ir
contract, and (3) cause of the obligation which is established.101
of credit in favor of plain
conditions.
In this case, to establish the existence of a perfected contract of
sale between the parties, respondent Ssangyong formally offered G Letter to defendant SANYO To prove that defendan
in evidence the testimonies of its witnesses and the following SEIKE dated 20 June of the date of L/C open
exhibits: 2000, contained in defendant's conforme/a
facsimile/thermal paper
Exhibit Description Purpose G-1 Signature of defendant Gregory
Chan, contained in
E Pro forma Invoice dated 17 To show that defendants contracted facsimile/thermal paper.
April 2000 with Contract with plaintiff for the delivery of 110 MT
No. ST2-POSTS0401-1, photoc H
of stainless steel from Korea payable by Letter to defendants dated 22 To prove that defendan
opy way of an irrevocable letter of credit in June 2000, original of the successful price
favor of plaintiff, among other secured by plaintiff in fa
conditions.  and were advised of the
L/C opening.
E-1 Pro forma Invoice dated 17 To show that defendants sent their
April 2000 with Contract I
confirmation of the (i) delivery to it of the Letter to defendants dated 26 To prove that plaintiff re
No. ST2-POSTS0401, containe specified stainless steel products, (ii) June 2000, original requested defendants f
d in facsimile/thermal paper defendants' payment thereof
J by way of Letter to defendants dated 26 opening of the Letters o

116
 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
M-1 Signature of defendant Gregory   SSANGYONG to defendant
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
P Letter to defendants dated 06
July 2000, original
Q Demand letter to defendants
117
dated 15 Aug 2000, original to engaged services of
collection efforts.
R Demand letter to defendants To prove that defendan
defendants' failure and refusal to dated 23 Aug 2000, original first L/C in favor of plain
comply with their obligations and the for further postponemen
problems of plaintiff is incurring by and for minimal amoun
reason of defendants' failure and refusal open the final L/C on tim
To prove that defendants admit of their informed that failure to
liabilities to plaintiff, that they requested cancel the contract. 
for "more extension" of time for the
opening of the Letter ofSCredit, and Demand letter to defendants To show defendants' re
begging for favorable understanding dated 11 Sept 2000, original to open the final L/C on
and consideration. cancellation of the cont
consequence thereof, a
upon defendants to rem
W Letter from plaintiff To prove that there was
sale and purchase agre
SANYO SEIKI dated 13 April the parties for 220 metr
2000, with fax back from products at the price of
defendants SANYO SEIKI/MCC
to plaintiff
SSANGYONG, contained in
facsimile/thermal paper with
back-up photocopy
W-1 Conforme signature of To prove that defendan
  defendant Gregory Chan, through Gregory Chan,
contained in facsimile/thermal sale and purchase of 22
paper with back-up photocopy steel products at the pr
To prove that plaintiff reiterated its US$1,860/ton.
request for defendants to L/C opening
after the latter's requestW-2
for extension of Name of sender MCC Industrial To prove that defendan
time was granted, defendants' failure Sales Corporation conformity to the sale a
and refusal to comply therewith agreement by facsimile
extension of time notwithstanding.
X Pro forma Invoice dated 16 To prove that defendan
  August 2000, photocopy adjust and split the con
order into 2 shipments
tons each at the discou
To prove that plaintiff was constrained US$1,700/ton.
 X-1 Notation "1/2", photocopy
X-2 Ref. No. ST2-POSTS080-
1, photocopy
X-3 Conforme signature of
defendant Gregory
Chan, photocopy
DD Letter from defendant MCC to To prove that there was a perfected
plaintiff SSANGYONG dated 22 sale and purchase agreement between
August 2000, contained in
facsimile/thermal paper with
back-up photocopy
DD-1 Ref. No. ST2-POSTS080-
1, contained in
facsimile/thermal paper with
back-up photocopy
DD-2
Signature of defendant Gregory To prove that defendant
Chan, contained in
facsimile/thermal paper with
back-up photocopy
118
To prove that the present was delivered by plainti
Invoice was the first of 2 pro forma and paid for by defenda
invoices.
Significantly,
To prove that the present among these documentary evidence presented by
formaInvoice wasrespondent,
the first ofMCC,
2 in its petition before this Court, assails the
formainvoices. admissibility only of Pro Forma Invoice Nos. ST2-POSTS0401-
1 and ST2-POSTS0401-2 (Exhibits
To prove that defendant MCC, acting "E" and "F"). After sifting
through the records,
through Gregory Chan, agreed to the the Court found that these invoices are mere
photocopies of their
sale and purchase of the balance of 100 original fax transmittals. Ssangyong avers
that these documents
metric tons at the discounted price of were prepared after MCC asked for the
splitting of the
US$1,700/ton, apart from the otheroriginal order into two, so that the latter can apply
for an L/C with greater
order and shipment of 100 metric tons facility. It, however, failed to explain why
the originals
which was delivered by plaintiffof these documents were not presented. 
SSANGYONG and paid for by
defendant MCC. 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.
plaintiff SSANGYONG and defendant
MCC for the balance of 100 metric tons,
Because
apart from the other order these
and documents
shipment are mere photocopies, they are simply
secondary evidence,
of 100 metric tons which was delivered admissible only upon compliance with Rule
by plaintiff SSANGYONG and paid forstates, "[w]hen the original document has
130, Section 5, which
been lost or destroyed, or cannot be produced in court, the
by defendant MCC.
offeror, upon proof of its execution or existence and the cause of
To prove that there was a perfected
its unavailability without bad faith on his part, may prove its
sale and purchase agreement
contents by a copy, between
or by a recital of its contents in some
plaintiff SSANGYONG
authentic and defendant
document, or by the testimony of witnesses in the order
MCC for the balance
stated." ofFurthermore,
100 metric tons, the offeror of secondary evidence must
apart from the other
proveorder and shipment
the predicates thereof, namely: (a) the loss or destruction
of 100 metric tons which
of the was without
original delivered bad faith on the part of the
by plaintiff SSANGYONG and
proponent/offeror paid for can be shown by circumstantial evidence
which
by defendant MCC.
of routine practices of destruction of documents; (b) the
proponentMCC,
must acting
prove by a fair preponderance of evidence as to
through Gregory raise
Chan,a reasonable
agreed to theinference of the loss or destruction of the
original
sale and purchase copy;
of the and (c)
balance it must be shown that a diligent and bona
of 100
fide but
metric tons, apart from unsuccessful
the other order search has been made for the document in
and shipment ofthe100proper
metric place
tonsor places. It has been held that where the
which
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.  Forma Invoice (Exhibit "1-A"). Observably further, both
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.
119
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. ST2-
POSTS080-1, 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
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
120
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 DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304
on evidence of, the actual amount thereof.113
SIZE AND QUANTITY:
Furthermore, the sales contract and its authentication certificates, 2.6 MM X 4' X C 10.0MT
Exhibits "V" and "V-1," allegedly evidencing the resale at a loss of 3.0 MM X 4' X C 25.0MT
the stainless steel subject of the parties' breached contract, fail to 4.0 MM X 4' X C 15.0MT
convince this Court of the veracity of its contents. The steel items
indicated in the sales contract114 with a Korean corporation are 4.5 MM X 4' X C 15.0MT
different in all respects from the items ordered by petitioner MCC, 5.0 MM X 4' X C 10.0MT
even in size and quantity. We observed the following 6.0 MM X 4' X C 25.0MT
discrepancies:
TOTAL: 100MT116
List of commodities as stated in Exhibit "V":
From the foregoing, we find merit in the contention of MCC that
Ssangyong did not adequately prove that the items resold at a
COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge
loss were the same items ordered by the petitioner. Therefore, as
SPEC: SUS304 NO. 1
the claim for actual damages was not proven, the Court cannot
SIZE/Q'TY: sanction the award. 
2.8MM X 1,219MM X C 8.193MT
3.0MM X 1,219MM X C 7.736MT Nonetheless, the Court finds that petitioner knowingly breached
its contractual obligation and obstinately refused to pay despite
3.0MM X 1,219MM X C 7.885MT repeated demands from respondent. Petitioner even asked for
3.0MM X 1,219MM X C 8.629MT several extensions of time for it to make good its obligation. But in
4.0MM X 1,219MM X C 7.307MT spite of respondent's continuous accommodation, petitioner
completely reneged on its contractual duty. For such inattention
4.0MM X 1,219MM X C 7.247MT and insensitivity, MCC must be held liable for nominal damages.
4.5MM X 1,219MM X C 8.450MT "Nominal damages are 'recoverable where a legal right is
4.5MM X 1,219MM X C 8.870MT technically violated and must be vindicated against an invasion
that has produced no actual present loss of any kind or where
5.0MM X 1,219MM X C 8.391MT there has been a breach of contract and no substantial injury or
6.0MM X 1,219MM X C 6.589MT actual damages whatsoever have been or can be
6.0MM X 1,219MM X C 7.878MT shown.'"117 Accordingly, the Court awards nominal damages
of P200,000.00 to respondent Ssangyong.
6.0MM X 1,219MM X C 8.397MT
TOTAL: 95.562MT115 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
List of commodities as stated in Exhibit "X" (the invoice winning party is entitled to an automatic grant of attorney's fees.
that was not paid): The party must show that he falls under one of the instances

121
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.
18. G.R. No. 182835               April 20, 2010
RUSTAN ANG y PASCUA, Petitioner,  Irish learned afterwards that Rustan had taken a live-in partner
vs.
THE HONORABLE COURT OF APPEALS and IRISH
SAGUD, Respondents.
122
This case concerns a claim of commission of the crime of
violence against women when a former boyfriend sent to the girl
the picture of a naked woman, not her, but with her face on it.
The Indictment
The public prosecutor charged petitioner-accused Rustan Ang
(Rustan) before the Regional Trial Court (RTC) of Baler, Aurora,
of violation of the Anti-Violence Against Women and Their
Children Act or Republic Act (R.A.) 9262 in an information that
reads:
That on or about June 5, 2005, in the Municipality of Maria
Aurora, Province of Aurora, Philippines and within the jurisdiction
of this Honorable Court, the said accused willfully, unlawfully and
feloniously, in a purposeful and reckless conduct, sent through
the Short Messaging Service (SMS) using his mobile phone, a
pornographic picture to one Irish Sagud, who was his former
girlfriend, whereby the face of the latter was attached to a
completely naked body of another woman making it to appear
that it was said Irish Sagud who is depicted in the said obscene
and pornographic picture thereby causing substantial emotional
anguish, psychological distress and humiliation to the said Irish
Sagud.1
The Facts and the Case
The evidence for the prosecution shows that complainant Irish
Sagud (Irish) and accused Rustan were classmates at Wesleyan
University in Aurora Province. Rustan courted Irish and they
became "on-and-off" sweethearts towards the end of 2004. When
(now his wife), whom he had gotten pregnant, Irish broke up with
him. 
Before Rustan got married, however, he got in touch with Irish
and tried to convince her to elope with him, saying that he did not
love the woman he was about to marry. Irish rejected the
proposal and told Rustan to take on his responsibility to the other
woman and their child. Irish changed her cellphone number but
Rustan somehow managed to get hold of it and sent her text
messages. Rustan used two cellphone numbers for sending his
messages, namely, 0920-4769301 and 0921-8084768. Irish
replied to his text messages but it was to ask him to leave her
alone.
In the early morning of June 5, 2005, Irish received through
multimedia message service (MMS) a picture of a naked woman
with spread legs and with Irish’s face superimposed on the figure
(Exhibit A).2 The sender’s cellphone number, stated in the
message, was 0921-8084768, one of the numbers that Rustan
used. Irish surmised that he copied the picture of her face from a
shot he took when they were in Baguio in 2003 (Exhibit B).3
After she got the obscene picture, Irish got other text messages
from Rustan. He boasted that it would be easy for him to create
similarly scandalous pictures of her. And he threatened to spread
the picture he sent through the internet. One of the messages he
sent to Irish, written in text messaging shorthand, read: "Madali
lang ikalat yun, my chatrum ang tarlac rayt pwede ring send sa
lahat ng chatter."4
Irish sought the help of the vice mayor of Maria Aurora who
referred her to the police. Under police supervision, Irish
contacted Rustan through the cellphone numbers he used in
sending the picture and his text messages. Irish asked Rustan to
meet her at the Lorentess Resort in Brgy. Ramada, Maria Aurora,
and he did. He came in a motorcycle. After parking it, he walked
towards Irish but the waiting police officers intercepted and
arrested him. They searched him and seized his Sony Ericsson
P900 cellphone and several SIM cards. While Rustan was being
questioned at the police station, he shouted at Irish: "Malandi ka
kasi!"
123
Joseph Gonzales, an instructor at the Aurora State College of
Technology, testified as an expert in information technology and
computer graphics. He said that it was very much possible for
one to lift the face of a woman from a picture and superimpose it
on the body of another woman in another picture. Pictures can be
manipulated and enhanced by computer to make it appear that
the face and the body belonged to just one person. 
Gonzales testified that the picture in question (Exhibit A) had two
distinct irregularities: the face was not proportionate to the body
and the face had a lighter color. In his opinion, the picture was
fake and the face on it had been copied from the picture of Irish in
Exhibit B. Finally, Gonzales explained how this could be done,
transferring a picture from a computer to a cellphone like the
Sony Ericsson P900 seized from Rustan.
For his part, Rustan admitted having courted Irish. He began
visiting her in Tarlac in October 2003 and their relation lasted until
December of that year. He claimed that after their relation ended,
Irish wanted reconciliation. They met in December 2004 but, after
he told her that his girlfriend at that time (later his wife) was
already pregnant, Irish walked out on him. 
Sometime later, Rustan got a text message from Irish, asking him
to meet her at Lorentess Resort as she needed his help in selling
her cellphone. When he arrived at the place, two police officers
approached him, seized his cellphone and the contents of his
pockets, and brought him to the police station.
Rustan further claims that he also went to Lorentess because
Irish asked him to help her identify a prankster who was sending
her malicious text messages. Rustan got the sender’s number
and, pretending to be Irish, contacted the person. Rustan claims
that he got back obscene messages from the prankster, which he
forwarded to Irish from his cellphone. This explained, he said,
why the obscene messages appeared to have originated from his
cellphone number. Rustan claims that it was Irish herself who
sent the obscene picture (Exhibit A) to him. He presented six
pictures of a woman whom he identified as Irish (Exhibits 2 to 7).5
Michelle Ang (Michelle), Rustan’s wife, testified that she was sure
Irish sent the six pictures. Michelle claims that she received the
pictures and hid the memory card (Exhibit 8) that contained them
because she was jealous and angry. She did not want to see
anything of Irish. But, while the woman in the pictures posed in
sexy clothing, in none did she appear naked as in Exhibit A.
Further, the face of the woman in Exhibits 2, 4, 5 and 6 could not
be seen. Irish denied that she was the woman in those four
pictures. As for Exhibits 3 and 7, the woman in the picture was
fully dressed.
After trial, the RTC found Irish’s testimony completely credible,
given in an honest and spontaneous manner. The RTC observed
that she wept while recounting her experience, prompting the
court to comment: "Her tears were tangible expression of pain
and anguish for the acts of violence she suffered in the hands of
her former sweetheart. The crying of the victim during her
testimony is evidence of the credibility of her charges with the
verity borne out of human nature and experience."6 Thus, in its
Decision dated August 1, 2001, the RTC found Rustan guilty of
the violation of Section 5(h) of R.A. 9262.
On Rustan’s appeal to the Court of Appeals (CA),7 the latter
rendered a decision dated January 31, 2008,8 affirming the RTC
decision. The CA denied Rustan’s motion for reconsideration in a
resolution dated April 25, 2008. Thus, Rustan filed the present for
review on certiorari.
The Issues Presented
The principal issue in this case is whether or not accused Rustan
sent Irish by cellphone message the picture with her face pasted
on the body of a nude woman, inflicting anguish, psychological
124
distress, and humiliation on her in violation of Section 5(h) of R.A.
9262.
The subordinate issues are:
1. Whether or not a "dating relationship" existed between
Rustan and Irish as this term is defined in R.A. 9262;
2. Whether or not a single act of harassment, like the
sending of the nude picture in this case, already
constitutes a violation of Section 5(h) of R.A. 9262;
3. Whether or not the evidence used to convict Rustan
was obtained from him in violation of his constitutional
rights; and
4. Whether or not the RTC properly admitted in evidence
the obscene picture presented in the case.
The Court’s Rulings
Section 3(a) of R.A. 9262 provides that violence against women
includes an act or acts of a person against a woman with whom
he has or had a sexual or dating relationship. Thus:
SEC. 3. Definition of Terms. – As used in this Act, 
(a) "Violence against women and their children" refers to
any act or a series of acts committed by any person
against a woman who is his wife, former wife, or against a
woman with whom the person has or had a sexual or
dating relationship, or with whom he has a common child,
or against her child whether legitimate or illegitimate,
within or without the family abode, which result in or is
likely to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of such
 acts, battery, assault, coercion, harassment or arbitrary
deprivation of liberty.  emotional or psychological distress to her.
xxxx
Section 5 identifies the act or acts that constitute violence
against women and these include any form of harassment
that causes substantial emotional or psychological
distress to a woman. Thus:
SEC. 5. Acts of Violence Against Women and Their
Children. – The crime of violence against women and
their children is committed through any of the following
acts:  the course of the relationship. A casual acquaintance or ordinary
xxxx
h. Engaging in purposeful, knowing, or reckless conduct,
personally or through another, that alarms or causes
substantial emotional or psychological distress to the
woman or her child. This shall include, but not be limited
to, the following acts:  which provides a colloquial or informal meaning to the word
xxxx
5. Engaging in any form of harassment or violence; 
The above provisions, taken together, indicate that the elements
of the crime of violence against women through harassment are:
1. The offender has or had a sexual or dating relationship
with the offended woman;
2. The offender, by himself or through another, commits
an act or series of acts of harassment against the woman;
and
125
3. The harassment alarms or causes substantial
One. The parties to this case agree that the prosecution needed
to prove that accused Rustan had a "dating relationship" with
Irish. Section 3(e) provides that a "dating relationship" includes a
situation where the parties are romantically involved over time
and on a continuing basis during the course of the relationship.
Thus:
(e) "Dating relationship" refers to a situation wherein the parties
live as husband and wife without the benefit of marriage or are
romantically involved over time and on a continuing basis during
socialization between two individuals in a business or social
context is not a dating relationship. (Underscoring supplied.)
Here, Rustan claims that, being "romantically involved," implies
that the offender and the offended woman have or had sexual
relations. According to him, "romance" implies a sexual act. He
cites Webster’s Comprehensive Dictionary Encyclopedia Edition
"romance" used as a verb, i.e., "to make love; to make love to" as
in "He romanced her." 
But it seems clear that the law did not use in its provisions the
colloquial verb "romance" that implies a sexual act. It did not say
that the offender must have "romanced" the offended woman.
Rather, it used the noun "romance" to describe a couple’s
relationship, i.e., "a love affair."9
R.A. 9262 provides in Section 3 that "violence against women x x
x refers to any act or a series of acts committed by any person
against a woman x x x with whom the person has or had a
sexual or dating relationship." Clearly, the law itself distinguishes
a sexual relationship from a dating relationship. Indeed, Section
3(e) above defines "dating relationship" while Section 3(f) defines
"sexual relations." The latter "refers to a single sexual act which
may or may not result in the bearing of a common child." The
dating relationship that the law contemplates can, therefore, exist
even without a sexual intercourse taking place between those
involved.
Rustan also claims that since the relationship between Irish and
him was of the "on-and-off" variety (away-bati), their romance
cannot be regarded as having developed "over time and on a
continuing basis." But the two of them were romantically involved,
as Rustan himself admits, from October to December of 2003.
That would be time enough for nurturing a relationship of mutual
trust and love.  2 to 7 had remained saved after she deleted the pictures. Later,
An "away-bati" or a fight-and-kiss thing between two lovers is a
common occurrence. Their taking place does not mean that the
romantic relation between the two should be deemed broken up
during periods of misunderstanding. Explaining what "away-bati"
meant, Irish explained that at times, when she could not reply to
Rustan’s messages, he would get angry at her. That was all.
Indeed, she characterized their three-month romantic relation as
continuous.10
Two. Rustan argues that the one act of sending an offensive
picture should not be considered a form of harassment. He claims
that such would unduly ruin him personally and set a very
dangerous precedent. But Section 3(a) of R.A. 9262 punishes
"any act or series of acts" that constitutes violence against
women. This means that a single act of harassment, which
translates into violence, would be enough. The object of the law is
to protect women and children. Punishing only violence that is
repeatedly committed would license isolated ones.
Rustan alleges that today’s women, like Irish, are so used to
obscene communications that her getting one could not possibly
have produced alarm in her or caused her substantial emotional
or psychological distress. He claims having previously exchanged
126
obscene pictures with Irish such that she was already
desensitized by them.
But, firstly, the RTC which saw and heard Rustan and his wife
give their testimonies was not impressed with their claim that it
was Irish who sent the obscene pictures of herself (Exhibits 2-7).
It is doubtful if the woman in the picture was Irish since her face
did not clearly show on them. 
Michelle, Rustan’s wife, claimed that she deleted several other
pictures that Irish sent, except Exhibits 2 to 7. But her testimony
did not make sense. She said that she did not know that Exhibits
however, she said that she did not have time to delete
them.11 And, if she thought that she had deleted all the pictures
from the memory card, then she had no reason at all to keep and
hide such memory card. There would have been nothing to hide.
Finally, if she knew that some pictures remained in the card, there
was no reason for her to keep it for several years, given that as
she said she was too jealous to want to see anything connected
to Irish. Thus, the RTC was correct in not giving credence to her
testimony. 1avvphi1
Secondly, the Court cannot measure the trauma that Irish
experienced based on Rustan’s low regard for the alleged moral
sensibilities of today’s youth. What is obscene and injurious to an
offended woman can of course only be determined based on the
circumstances of each case. Here, the naked woman on the
picture, her legs spread open and bearing Irish’s head and face,
was clearly an obscene picture and, to Irish a revolting and
offensive one. Surely, any woman like Irish, who is not in the
pornography trade, would be scandalized and pained if she sees
herself in such a picture. What makes it further terrifying is that,
as Irish testified, Rustan sent the picture with a threat to post it in
the internet for all to see. That must have given her a nightmare.
Three. Rustan argues that, since he was arrested and certain
items were seized from him without any warrant, the evidence
presented against him should be deemed inadmissible. But the
fact is that the prosecution did not present in evidence either the
cellphone or the SIM cards that the police officers seized from
him at the time of his arrest. The prosecution did not need such
items to prove its case. Exhibit C for the prosecution was but a
photograph depicting the Sony Ericsson P900 cellphone that was
used, which cellphone Rustan admitted owning during the pre-
trial conference.  Besides, the rules he cites do not apply to the present criminal
Actually, though, the bulk of the evidence against him consisted
in Irish’s testimony that she received the obscene picture and
malicious text messages that the sender’s cellphone numbers
belonged to Rustan with whom she had been previously in
communication. Indeed, to prove that the cellphone numbers
belonged to Rustan, Irish and the police used such numbers to
summon him to come to Lorentess Resort and he
did.12 Consequently, the prosecution did not have to present the
confiscated cellphone and SIM cards to prove that Rustan sent
those messages.
But, firstly, Rustan is raising this objection to the admissibility of
the obscene picture, Exhibit A, for the first time before this Court.
The objection is too late since he should have objected to the
admission of the picture on such ground at the time it was offered
in evidence. He should be deemed to have already waived such
ground for objection.14
action. The Rules on Electronic Evidence applies only to civil
actions, quasi-judicial proceedings, and administrative
proceedings.15
In conclusion, this Court finds that the prosecution has proved
each and every element of the crime charged beyond reasonable
doubt. 
WHEREFORE, the Court DENIES the petition and AFFIRMS the
decision of the Court of Appeals in CA-G.R. CR 30567 dated
January 31, 2008 and its resolution dated April 25, 2008.

Moreover, Rustan admitted having sent the malicious text SO ORDERED.

messages to Irish.13 His defense was that he himself received
those messages from an unidentified person who was harassing
Irish and he merely forwarded the same to her, using his
cellphone. But Rustan never presented the cellphone number of
the unidentified person who sent the messages to him to
authenticate the same. The RTC did not give credence to such
version and neither will this Court. Besides, it was most unlikely
for Irish to pin the things on Rustan if he had merely tried to help
her identify the sender. 

Four. Rustan claims that the obscene picture sent to Irish through
a text message constitutes an electronic document. Thus, it
should be authenticated by means of an electronic signature, as
provided under Section 1, Rule 5 of the Rules on Electronic
Evidence (A.M. 01-7-01-SC). 

127
 19. G.R. No. 203302               April 11, 2013

MAYOR EMMANUEL L. MALIKSI, Petitioner, 

vs.
COMMISSION ON ELECTIONS AND HOMER T.
SAQUILAVAN, Respondents.

RESOLUTION

BERSAMIN, J.:

The Court hereby resolves the Extremely Urgent Motion for

Reconsideration tiled by petitioner Emmanuel L. Maliksi against
the Court's decision promulgated on March 12, 2013, dismissing
his petition for certiorari assailing the resolution dated September
14, 2012 of the Commission on Elections (COMELEC) En Bane
that sustained the declaration of respondent Homer T. Saquilayan
as the duly elected Mayor of Imus, Cavite.

For clarity, we briefly restate the factual antecedents.

During the 2010 Elections, the Municipal Board of Canvassers

proclaimed Saquilayan the winner for the position of Mayor of
Imus, Cavite. Maliksi, the candidate who garnered the second
highest number of votes, brought an election protest in the
Regional Trial Court (RTC) in Imus, Cavite alleging that there
were irregularities in the counting of votes in 209 clustered
precincts. Subsequently, the RTC held a revision of the votes,
and, based on the results of the revision, declared Maliksi as the
duly elected Mayor of Imus commanding Saquilayan to cease
and desist from performing the functions of said office.
Saquilayan appealed to the COMELEC. In the meanwhile, the
RTC granted Maliksi’s motion for execution pending appeal, and
Maliksi was then installed as Mayor.

In resolving the appeal, the COMELEC First Division, without

giving notice to the parties, decided to recount the ballots through

128
the use of the printouts of the ballot images from the CF cards.
Thus, it issued an order dated March 28, 2012 requiring
Saquilayan to deposit the amount necessary to defray the
expenses for the decryption and printing of the ballot images.
Later, it issued another order dated April 17, 2012 for Saquilayan
to augment his cash deposit.
On August 15, 2012, the First Division issued a resolution
nullifying the RTC’s decision and declaring Saquilayan as the
duly elected Mayor.1
Maliksi filed a motion for reconsideration, alleging that he had
been denied his right to due process because he had not been
notified of the decryption proceedings. He argued that the resort
to the printouts of the ballot images, which were secondary
evidence, had been unwarranted because there was no proof that
the integrity of the paper ballots had not been preserved.
On September 14, 2012, the COMELEC En Banc resolved to
deny Maliksi’s motion for reconsideration.2
Maliksi then came to the Court via petition for certiorari,
reiterating his objections to the decryption, printing, and
examination of the ballot images without prior notice to him, and
to the use of the printouts of the ballot images in the recount
proceedings conducted by the First Division. 1âwphi1
In the decision promulgated on March 12, 2013, the Court, by a
vote of 8-7, dismissed Maliksi’s petition for certiorari. The Court
concluded that Maliksi had not been denied due process
because: (a) he had received notices of the decryption, printing,
and examination of the ballot images by the First Division —
referring to the orders of the First Division directing Saquilayan to
post and augment the cash deposits for the decryption and
printing of the ballot images; and (b) he had been able to raise his
objections to the decryption in his motion for reconsideration. The
Court then pronounced that the First Division did not abuse its
129
discretion in deciding to use the ballot images instead of the
paper ballots, explaining that the printouts of the ballot images
were not secondary images, but considered original documents
with the same evidentiary value as the official ballots under the
Rule on Electronic Evidence; and that the First Division’s finding
that the ballots and the ballot boxes had been tampered had been
fully established by the large number of cases of double-shading
discovered during the revision.
In his Extremely Urgent Motion for Reconsideration, Maliksi
raises the following arguments, to wit:
I.
WITH ALL DUE RESPECT, THIS HONORABLE SUPREME
COURT EN BANC GRAVELY ERRED IN DISMISSING THE
INSTANT PETITION DESPITE A CLEAR VIOLATION OF
PETITIONER’S CONSTITUTIONAL RIGHT TO DUE PROCESS
OF LAW CONSIDERING THAT DECRYPTION, PRINTING AND
EXAMINATION OF THE DIGITAL IMAGES OF THE BALLOTS,
WHICH IS THE BASIS FOR THE ASSAILED 14 SEPTEMBER
2012 RESOLUTION OF THE PUBLIC RESPONDENT, WHICH
IN TURN AFFIRMED THE 15 AUGUST 2012 RESOLUTION OF
THE COMELEC FIRST DIVISION, WERE DONE
INCONSPICUOUSLY UPON A MOTU PROPRIO DIRECTIVE OF
THE COMELEC FIRST DIVISION SANS ANY NOTICE TO THE
PETITIONER, AND FOR THE FIRST TIME ON APPEAL.
II.
WITH ALL DUE RESPECT, THIS HONORABLE SUPREME
COURT EN BANC GRAVELY ERRED IN UPHOLDING THE
COMELEC FIRST DIVISION’S RULING TO DISPENSE WITH
THE PHYSICAL BALLOTS AND RESORT TO THEIR DIGITAL
IMAGES NOTWITHSTANDING THE FACT THAT THE BALLOTS
ARE THE BEST AND MOST CONCLUSIVE EVIDENCE OF THE
VOTERS’ WILL, AND THAT BALLOT IMAGES CAN BE
RESORTED TO ONLY IF THE OFFICIAL BALLOTS ARE LOST
OR THEIR INTEGRITY WAS COMPROMISED AS
DETERMINED BY THE RECOUNT/REVISION COMMITTEE,
CIRCUMSTANCES WHICH ARE WANTING IN THIS CASE,
AND IN FACT THE INTEGRITY OF THE BALLOT BOXES AND
ITS CONTENTS WAS PRESERVED AND THE ISSUE OF
TAMPERING WAS ONLY BELATEDLY RAISED BY THE
PRIVATE RESPONDENT AFTER THE REVISION RESULTS
SHOWED THAT HE LOST.
III.
WITH ALL DUE RESPECT, IT IS THE HUMBLE SUBMISSION
OF THE PETITIONER-MOVANT THAT THE 12 MARCH 2013
RESOLUTION ISSUED BY THE HONORABLE SUPREME
COURT EN BANC IS NULL AND VOID AB INITIO AND
THEREFORE OF NO FORCE AND EFFECT, FOR HAVING
BEEN PROMULGATED DESPITE THE ABSENCE OF
HONORABLE SUPREME COURT JUSTICE JOSE PORTUGAL
PEREZ AT THE TIME OF THE DELIBERATION AND VOTING
ON THE 12 MARCH 2013 RESOLUTION IN THE INSTANT
CASE.3
Maliksi insists: (a) that he had the right to be notified of every
incident of the proceedings and to be present at every stage
thereof; (b) that he was deprived of such rights when he was not
informed of the decryption, printing, and examination of the ballot
images by the First Division; (c) that the March 28, 2012 and April
17, 2012 orders of the First Division did not sufficiently give him
notice inasmuch as the orders did not state the date, time, and
venue of the decryption and printing of the ballot images; and (d)
that he was thus completely deprived of the opportunity to
participate in the decryption proceedings.
Maliksi contends that the First Division’s motu proprio directive for
the decryption, printing, and examination of the ballot images was
highly irregular. In this regard, he asserts: (a) that the decryption,
printing, and examination should have taken place during the
130
revision before the trial court and after the revision committee had
determined that the integrity of the official ballots had not been
preserved; (b) that the trial court did not make such
determination; (c) that, in fact, Saquilayan did not allege or
present any proof in the RTC to show that the ballots or the ballot
boxes had been tampered, and had, in fact, actively participated
in the revision proceedings; (d) that the First Division should not
have entertained the allegation of ballot tampering belatedly
raised on appeal; (e) that the First Division should have limited
itself to reviewing the evidence on record; and (f) that the First
Division did not even explain how it had arrived at the conclusion
that the integrity of the ballots had not been preserved.
Maliksi submits that the decision promulgated on March 12, 2013
is null and void for having been promulgated despite the absence
from the deliberations and lack of signature of Justice Jose
Portugal Perez.
Ruling
The Court grants Maliksi’s Extremely Urgent Motion for
Reconsideration, and reverses the decision promulgated on
March 12, 2013 on the ground that the First Division of the
COMELEC denied to him the right to due process by failing to
give due notice on the decryption and printing of the ballot
images. Consequently, the Court annuls the recount proceedings
conducted by the First Division with the use of the printouts of the
ballot images.
It bears stressing at the outset that the First Division should not
have conducted the assailed recount proceedings because it was
then exercising appellate jurisdiction as to which no existing rule
of procedure allowed it to conduct a recount in the first instance.
The recount proceedings authorized under Section 6, Rule 15 of
COMELEC Resolution No. 8804, as amended, are to be
conducted by the COMELEC Divisions only in the exercise of
their exclusive original jurisdiction over all election protests
involving elective regional (the autonomous regions), provincial
and city officials.4
As we see it, the First Division arbitrarily arrogated unto itself the
conduct of the recount proceedings, contrary to the regular
procedure of remanding the protest to the RTC and directing the
reconstitution of the Revision Committee for the decryption and
printing of the picture images and the revision of the ballots on
the basis thereof. Quite unexpectedly, the COMELEC En Banc
upheld the First Division’s unwarranted deviation from the
standard procedures by invoking the COMELEC’s power to "take
such measures as the Presiding Commissioner may deem
proper," and even citing the Court’s minute resolution in Alliance
of Barangay Concerns (ABC) Party-List v. Commission on
Elections5 to the effect that the "COMELEC has the power to
adopt procedures that will ensure the speedy resolution of its
cases. The Court will not interfere with its exercise of this
prerogative so long as the parties are amply heard on their
opposing claims."
Based on the pronouncement in Alliance of Barangay Concerns
(ABC) v. Commission on Elections, the power of the COMELEC
to adopt procedures that will ensure the speedy resolution of its
cases should still be exercised only after giving to all the parties
the opportunity to be heard on their opposing claims. The parties’
right to be heard upon adversarial issues and matters is never to
be waived or sacrificed, or to be treated so lightly because of the
possibility of the substantial prejudice to be thereby caused to the
parties, or to any of them. Thus, the COMELEC En Banc should
not have upheld the First Division’s deviation from the regular
procedure in the guise of speedily resolving the election protest,
in view of its failure to provide the parties with notice of its
proceedings and an opportunity to be heard, the most basic
requirements of due process.
I.
Due process requirements
131
The picture images of the ballots are electronic documents that
are regarded as the equivalents of the original official ballots
themselves.6 In Vinzons-Chato v. House of Representatives
Electoral Tribunal,7 the Court held that "the picture images of the
ballots, as scanned and recorded by the PCOS, are likewise
‘official ballots’ that faithfully capture in electronic form the votes
cast by the voter, as defined by Section 2(3) of R.A. No. 9369. As
such, the printouts thereof are the functional equivalent of the
paper ballots filled out by the voters and, thus, may be used for
purposes of revision of votes in an electoral protest."
That the two documents—the official ballot and its picture image
—are considered "original documents" simply means that both of
them are given equal probative weight. In short, when either is
presented as evidence, one is not considered as weightier than
the other.
But this juridical reality does not authorize the courts, the
COMELEC, and the Electoral Tribunals to quickly and
unilaterally resort to the printouts of the picture images of
the ballots in the proceedings had before them without
notice to the parties. Despite the equal probative weight
accorded to the official ballots and the printouts of their
picture images, the rules for the revision of ballots adopted
for their respective proceedings still consider the official
ballots to be the primary or best evidence of the voters’ will.
In that regard, the picture images of the ballots are to be
used only when it is first shown that the official ballots are
lost or their integrity has been compromised.
For instance, the aforesaid Section 6, Rule 15 of COMELEC
Resolution No. 8804 (In Re: Comelec Rules of Procedure on
Disputes In An Automated Election System in Connection with
the May 10, 2010 Elections), as amended by COMELEC
Resolution No. 9164, itself requires that "the Recount Committee
determines that the integrity of the ballots has been violated or
has not been preserved, or are wet and otherwise in such a
condition that (the ballots) cannot be recounted" before the
printing of the image of the ballots should be made, to wit:
xxxx
(g) Only when the Recount Committee, through its chairman,
determines that the integrity of the ballots has been preserved or
that no signs of tampering of the ballots are present, will the
recount proceed. In case there are signs that the ballots
contained therein are tampered, compromised, wet or are
otherwise in such a condition that it could not be recounted, the
Recount Committee shall follow paragraph (l) of this rule.
xxxx
(l) In the event the Recount Committee determines that the
integrity of the ballots has been violated or has not been
preserved, or are wet and otherwise in such a condition that it
cannot be recounted, the Chairman of the Committee shall
request from the Election Records and Statistics Department
(ERSD), the printing of the image of the ballots of the subject
precinct stored in the CF card used in the May 10, 2010 elections
in the presence of the parties. Printing of the ballot images shall
proceed only upon prior authentication and certification by a duly
authorized personnel of the Election Records and Statistics
Department (ERSD) that the data or the images to be printed are
genuine and not substitutes. (Emphases supplied.)
xxxx
Section 6, Rule 10 (Conduct of Revision) of the 2010 Rules of
Procedure for Municipal Election Contests, which governs the
proceedings in the Regional Trial Courts exercising original
jurisdiction over election protests, provides:
xxxx
132
(m) In the event that the revision committee determines that the
integrity of the ballots and the ballot box have not been
preserved, as when proof of tampering or substitution exists, it
shall proceed to instruct the printing of the picture image of the
ballots stored in the data storage device for the precinct. The
court shall provide a non-partisan technical person who shall
conduct the necessary authentication process to ensure that the
data or image stored is genuine and not a substitute. Only after
this determination can the printed picture image be used for the
recount. (Emphases supplied.)
xxxx
A similar procedure is found in the 2010 Rules of the Presidential
Electoral Tribunal, to wit:
Rule 43. Conduct of the revision. – The revision of votes shall be
done through the use of appropriate PCOS machines or manually
and visually, as the Tribunal may determine, and according to the
following procedures:
xxxx
(q) In the event that the RC determines that the integrity of the
ballots and the ballot box was not preserved, as when there is
proof of tampering or substitution, it shall proceed to instruct the
printing of the picture image of the ballots of the subject precinct
stored in the data storage device for the same precinct. The
Tribunal may avail itself of the assistance of the COMELEC for
the service of a non-partisan technical person who shall conduct
the necessary authentication process to ensure that the data or
images stored are genuine and not merely substitutes. It is only
upon such determination that the printed picture image can be
used for the revision of votes. (Emphases supplied.)
xxxx
Also, the House of Representative Electoral Tribunal’s Guidelines
on the Revision of Ballots requires a preliminary hearing to be
held for the purpose of determining whether the integrity of the
ballots and ballot boxes used in the May 10, 2010 elections was
not preserved, as when there is proof of tampering or
substitutions, to wit:
Section 10. Revision of Ballots
xxxx
(d) When it has been shown, in a preliminary hearing set by the
parties or by the Tribunal, that the integrity of the ballots and
ballot boxes used in the May 10, 2010 elections was not
preserved, as when there is proof of tampering or substitutions,
the Tribunal shall direct the printing of the picture images of the
ballots of the subject precinct stored in the data storage device for
the same precinct. The Tribunal shall provide a non-partisan
technical person who shall conduct the necessary authentication
process to ensure that the data or image stored is genuine and
not a substitute. It is only upon such determination that the
printed picture image can be used for the revision. (As amended
per Resolution of February 10, 2011; Emphases supplied.)
xxxx
All the foregoing rules on revision of ballots stipulate that the
printing of the picture images of the ballots may be resorted to
only after the proper Revision/Recount Committee has first
determined that the integrity of the ballots and the ballot boxes
was not preserved.
The foregoing rules further require that the decryption of the
images stored in the CF cards and the printing of the decrypted
images take place during the revision or recount proceedings.
There is a good reason for thus fixing where and by whom the
decryption and the printing should be conducted. It is during the
133
revision or recount conducted by the Revision/Recount
Committee when the parties are allowed to be represented, with
their representatives witnessing the proceedings and timely
raising their objections in the course of the proceedings.
Moreover, whenever the Revision/Recount Committee makes any
determination that the ballots have been tampered and have
become unreliable, the parties are immediately made aware of
such determination.
When, as in the present case, it was not the Revision/Recount
Committee or the RTC exercising original jurisdiction over the
protest that made the finding that the ballots had been tampered,
but the First Division in the exercise of its appellate jurisdiction,
the parties should have been given a formal notice thereof.
Maliksi was not immediately made aware of that crucial finding
because the First Division did not even issue any written
resolution stating its reasons for ordering the printing of the
picture images. The parties were formally notified that the First
Division had found that the ballots had been tampered only when
they received the resolution of August 15, 2012, whereby the First
Division nullified the decision of the RTC and declared
Saquilayan as the duly elected Mayor. Even so, the resolution of
the First Division to that effect was unusually mute about the
factual bases for the finding of ballot box tampering, and did not
also particularize how and why the First Division was concluding
that the integrity of the ballots had been compromised. All that the
First Division declared as justification was a simple generalization
of the same being apparent from the allegations of ballot and
ballot box tampering and upon inspection of the ballot boxes, viz:
xxxx
The Commission (First Division) took into consideration the
allegations of ballot and ballot box tampering and upon inspecting
the ballot boxes, it is apparent that the integrity of the ballots had
been compromised so, to be able to best determine the true will
of the electorate, we decided to go over the digital image of the
appealed ballots.8(Emphasis supplied)
xxxx
It was the COMELEC En Banc’s assailed resolution of September
14, 2012 that later on provided the explanation to justify the First
Division’s resort to the picture images of the ballots, by observing
that the "unprecedented number of double-votes" exclusively
affecting the position of Mayor and the votes for Saquilayan had
led to the belief that the ballots had been tampered. However,
that explanation by the COMELEC En Banc did not cure the First
Division’s lapse and did not erase the irregularity that had already
invalidated the First Division’s proceedings.
In his dissenting opinion, Justice Antonio T. Carpio advances the
view that the COMELEC’s finding of ballot tampering was a mere
surplusage because there was actually no need for such finding
before the ballots’ digital counterparts could be used. He cites
Section 3, Rule 16 of COMELEC Resolution No. 8804, as
amended by Resolution No. 9164, which states:
Section 3. Printing of Ballot Images. - In case the parties deem it
necessary, they may file a motion to be approved by the Division
of the Commission requesting for the printing of ballot images in
addition to those mentioned in the second paragraph of item (e).
Parties concerned shall provide the necessary materials in the
printing of images such as but not limited to copying papers,
toners and printers. Parties may also secure, upon prior approval
by the Division of the Commission, a soft copy of the ballot
images contained in a secured/hashed disc on the condition that
the ballot images be first printed, at the expense of the requesting
party, and that the printed copies be signed by the parties’
respective revisors or representatives and by an ERSD IT-
capable representative and deposited with the Commission.
134
The Over-all chairman shall coordinate with the Director IV,
Election Records and Statistics Department (ERSD), for the
printing of images. Said director shall in turn designate a
personnel who will be responsible in the printing of ballot images.
Justice Carpio posits that when a party files a motion for the
printing of the ballots that he or she deems necessary, there is
actually no need for a finding of tampering of the ballots or the
ballot boxes before the COMELEC Division may grant the motion.
He states that a determination by the parties that the printing is
necessary under Section 3 is a ground separate from Section
6(e), which in turn pertinently states that:
Section 6. Conduct of the Recount –
xxxx
(e) Before the opening of the ballot box, the Recount Committee
shall note its condition as well as that of the locks or locking
mechanism and record the condition in the recount report. From
its observation, the Recount Committee must also make a
determination as to whether the integrity of the ballot box has
been preserved.
In the event that there are signs of tampering or if the ballot box
appears to have been compromised, the Recount Committee
shall still proceed to open the ballot box and make a physical
inventory of the contents thereof. The committee shall, however,
record its general observation of the ballots and other documents
found in the ballot box.
The application of Section 3 to this case is inappropriate,
considering that the First Division did not in any way suggest in its
decision dated August 15, 2010 that it was resolving Saquilayan’s
motion to print the ballot images. Instead, the First Division made
therein a finding of tampering, thus:
The COMELEC (First Division) took into consideration the
allegations of ballot and ballot box tampering and upon inspecting
the ballot boxes, it is apparent that the integrity of the ballots had
been compromised so, to be able to best determine the true will
of the electorate, we decided to go over the digital images of the
appealed ballots.
Even the COMELEC En Banc did not indicate in its decision
dated September 14, 2012 that the First Division merely resolved
Saquilayan’s motion for the printing of the ballot images; instead,
it reinforced the First Division’s finding that there was tampering
of the ballots. The non-mention of Saquilayan’s motion was a
clear indication of the COMELEC’s intention to act motu proprio;
and also revealed its interpretation of its very own rules, that
there must be justifiable reason, i.e. tampering, before the ballot
images could be resorted to.
The application of Section 3 would only highlight the First
Division’s denial of Maliksi’s right to due process. For, if the First
Division was really only acting on a motion to allow the printing of
the ballot images, there was a greater reason for the First
Division to have given the parties notice of its ruling thereon. But,
as herein noted, the First Division did not issue such ruling.
To interpret Section 3 as granting to any one of the parties the
right to move for the printing of the ballot images should such
party deem it necessary, and the COMELEC may grant such
motion, is contrary to its clear wording. Section 3 explicitly states:
"in case the parties deem it necessary, they may file a motion."
The provision really envisions a situation in which both parties
have agreed that the ballot images should be printed. Should only
one of the parties move for the printing of the ballot images, it is
not Section 3 that applies but Section 6(e), which then requires a
finding that the integrity of the ballots has been compromised.
The disregard of Maliksi’s right to be informed of the decision to
print the picture images of the ballots and to conduct the recount
proceedings during the appellate stage cannot be brushed aside
135
by the invocation of the fact that Maliksi was able to file, after all,
a motion for reconsideration. To be exact, the motion for
reconsideration was actually directed against the entire resolution
of the First Division, while Maliksi’s claim of due process violation
is directed only against the First Division’s recount proceedings
that resulted in the prejudicial result rendered against him.
Notably, the First Division did not issue any order directing the
recount. Without the written order, Maliksi was deprived of the
chance to seek any reconsideration or even to assail the
irregularly-held recount through a seasonable petition for
certiorari in this Court. In that context, he had no real opportunity
to assail the conduct of the recount proceedings.
The service of the First Division orders requiring Saquilayan to
post and augment the cash deposits for the printing of the picture
images did not sufficiently give Maliksi notice of the First
Division’s decision to print the picture images. The said orders did
not meet the requirements of due process because they did not
specifically inform Maliksi that the ballots had been found to be
tampered. Nor did the orders offer the factual bases for the
finding of tampering. Hence, to leave for Maliksi to surmise on the
factual bases for finding the need to print the picture images still
violated the principles of fair play, because the responsibility and
the obligation to lay down the factual bases and to inform Maliksi
as the party to be potentially prejudiced thereby firmly rested on
the shoulders of the First Division.
Moreover, due process of law does not only require notice of the
decryption, printing, and recount proceedings to the parties, but
also demands an opportunity to be present at such proceedings
or to be represented therein. Maliksi correctly contends that the
orders of the First Division simply required Saquilayan to post and
augment his cash deposit. The orders did not state the time, date,
and venue of the decryption and recount proceedings. Clearly,
the First Division had no intention of giving the parties the
opportunity to witness its proceedings.
Mendoza v. Commission on Elections9 instructs that notice to the
parties and their participation are required during the adversarial
aspects of the proceedings. In that case, after the revision of the
ballots and after the election protest case was submitted for
decision, the ballots and ballot boxes were transferred to the
Senate Electoral Tribunal (SET) in connection with a protest case
pending in the SET. Mendoza later learned that the COMELEC,
with the permission of the SET, had meanwhile conducted
proceedings within the SET’s premises. Mendoza then claimed
that his right to due process was violated because he had not
been given notice by the COMELEC that it would be conducting
further proceedings within the SET premises. The Court did not
sustain his claim, however, and pointed out:
After consideration of the respondents’ Comments and the
petitioner’s petition and Reply, we hold that the contested
proceedings at the SET ("contested proceedings") are no longer
part of the adversarial aspects of the election contest that would
require notice of hearing and the participation of the parties. As
the COMELEC stated in its Comment and without any contrary or
disputing claim in the petitioner’s Reply:
"However, contrary to the claim of petitioner, public respondent in
the appreciation of the contested ballots in EPC No. 2007-44
simultaneously with the SET in SET Case No. 001-07 is not
conducting "further proceedings" requiring notice to the parties.
There is no revision or correction of the ballots because EPC No.
2007-04 was already submitted for resolution. Public respondent,
in coordinating with the SET, is simply resolving the submitted
protest case before it. The parties necessarily take no part in said
deliberation, which require utmost secrecy. Needless to state, the
actual decision-making process is supposed to be conducted only
by the designated members of the Second Division of the public
respondent in strict confidentiality."
In other words, what took place at the SET were the internal
deliberations of the COMELEC, as a quasi-judicial body, in the
course of appreciating the evidence presented and deciding the
136
provincial election contest on the merits. These deliberations are
no different from judicial deliberations which are considered
confidential and privileged. We find it significant that the private
respondent’s Comment fully supported the COMELEC’s position
and disavowed any participation in the contested proceeding the
petitioner complained about. The petitioner, on the other hand,
has not shown that the private respondent was ever present in
any proceeding at the SET relating to the provincial election
contest.1âwphi1
To conclude, the rights to notice and to be heard are not material
considerations in the COMELEC’s handling of the Bulacan
provincial election contest after the transfer of the ballot boxes to
the SET; no proceedings at the instance of one party or of
COMELEC has been conducted at the SET that would require
notice and hearing because of the possibility of prejudice to the
other party. The COMELEC is under no legal obligation to notify
either party of the steps it is taking in the course of deliberating on
the merits of the provincial election contest. In the context of our
standard of review for the petition, we see no grave abuse of
discretion amounting to lack or excess of jurisdiction committed
by the COMELEC in its deliberation on the Bulacan election
contest and the appreciation of ballots this deliberation
entailed.10 (Emphasis supplied.)
Here, the First Division denominated the proceedings it had
conducted as an "appreciation of ballots" like in Mendoza. But
unlike in Mendoza, the proceedings conducted by the First
Division were adversarial, in that the proceedings included the
decryption and printing of the picture images of the ballots and
the recount of the votes were to be based on the printouts of the
picture images. The First Division did not simply review the
findings of the RTC and the Revision Committee, but actually
conducted its own recount proceedings using the printouts of the
picture image of the ballots. As such, the First Division was bound
to notify the parties to enable them to participate in the
proceedings.
Significantly, Section 6(l), Rule 15 of COMELEC Resolution No,
8804, as amended by COMELEC Resolution No. 9164, requires
the parties’ presence during the printing of the images of the
ballots, thus:
xxxx
(l) In the event the Recount Committee determines that the
integrity of the ballots has been violated or has not been
preserved, or are wet and otherwise in such a condition that it
cannot be recounted, the Chairman of the Committee shall
request from the Election Records and Statistics Department
(ERSD), the printing of the image of the ballots of the subject
precinct stored in the CF card used in the May 10, 2010 elections
in the presence of the parties. Printing of the ballot images shall
proceed only upon prior authentication and certification by a duly
authorized personnel of the Election Records and Statistics
Department (ERSD) that the data or the images to be printed are
genuine and not substitutes.
xxxx
We should not ignore that the parties’ participation during the
revision and recount proceedings would not benefit only the
parties, but was as vital and significant for the COMELEC as well,
for only by their participation would the COMELEC’s proceedings
attain credibility as to the result. The parties’ presence would
have ensured that the requisite procedures have been followed,
including the required authentication and certification that the
images to be printed are genuine. In this regard, the COMELEC
was less than candid, and was even cavalier in its conduct of the
decryption and printing of the picture images of the ballots and
the recount proceedings. The COMELEC was merely content
with listing the guidelines that the First Division had followed in
the appreciation of the ballots and the results of the recount. In
short, there was vagueness as to what rule had been followed in
the decryption and printing proceeding.
137
II.
Remand to the COMELEC
We are mindful of the urgent need to speedily resolve the election
protest because the term of the position involved is about to end.
Thus, we overlook pro hac vice the lack of factual basis for the
COMELEC’s decision to use the digital images of the ballots and
sustain its decision thereon. Although a remand of the election
protest to the RTC would have been the appropriate procedure,
we direct the COMELEC En Banc instead to conduct the
decryption and printing of the digital images of the ballots and to
hold recount proceedings, with due notice to all the parties and
opportunity for them to be present and to participate during such
proceedings. Nothing less serves the ideal objective safeguarded
by the Constitution.
In the absence of particular rules to govern its proceedings in
accordance with this disposition, the COMELEC is urged to follow
and observe Rule 15 of COMELEC Resolution No. 8804, as
amended by COMELEC Resolution No. 9164.
The Court, by this resolution, does not intend to validate the
victory of any of the parties in the 2010 Elections. That is not the
concern of the Court as yet. The Court simply does not want to
countenance a denial of the fundamental right to due process, a
cornerstone of our legal system.11 After all, it is the Court’s
primary duty to protect the basic rights of the people vis-à-vis
government actions, thus:
It cannot be denied that most government actions are inspired
with noble intentions, all geared towards the betterment of the
nation and its people. But then again, it is important to remember
this ethical principle: "The end does not justify the means." No
matter how noble and worthy of admiration the purpose of an act,
but if the means to be employed in accomplishing it is simply
irreconcilable with constitutional parameters, then it cannot still be
allowed. The Court cannot just turn a blind eye and simply let it
pass. It will continue to uphold the Constitution and its enshrined
principles.12
WHEREFORE, the Court PARTIALLY GRANTS the Extremely
Urgent Motion for Reconsideration of petitioner Emmanuel
Maliksi; REVERSES the Court's decision promulgated on March
12, 2013; and DIRECTS the Commission on Elections En Bane
to conduct proceedings for the decryption of the picture images of
the ballots involved in the protest after due authentication, and for
the recount of ballots by using the printouts of the ballot images,
with notice to and in the presence of the parties or their
representatives in accordance with the procedure laid down by
Rule 15 of COMELEC Resolution No. 8804, as amended by
Resolution No. 9164.
No pronouncement on costs of suit.
SO ORDERED.
138
20. G.R. No. 204894               March 10, 2014
PEOPLE OF THE PHILIPPINES, Appellee, 
vs.
NOEL ENOJAS y HINGPIT, ARNOLD GOMEZ y FABREGAS,
FERNANDO SANTOS y DELANTAR, and ROGER JALANDONI
y ARI, Appellants.
DECISION
ABAD, J.:
On September 4, 2006 the City Prosecutor of Las Piñas charged
appellants Noel Enojas y Hingpit (Enojas), Arnold Gomez y
Fabregas (Gomez), Fernando Santos y Delantar (Santos), and
Roger Jalandoni y Ari (Jalandoni) with murder before the Las
Pifias Regional Trial Court (RTC) in Criminal Case 06-0854. 1
PO2 Eduardo Gregorio, Jr. (P02 Gregorio) testified that at around
10:30 in the evening of August 29, 2006, he and P02 Francisco
Pangilinan (PO2 Pangilinan) were patrolling the vicinity of Toyota
Alabang and SM Southmall when they spotted a taxi that was
suspiciously parked in front of the Aguila Auto Glass shop near
the intersection of BF Almanza and Alabang-Zapote Roads. The
officers approached the taxi and asked the driver, later identified
as accused Enojas, for his documents. The latter complied but,
having entertained doubts regarding the veracity of documents
shown them, they asked him to come with them to the police
station in their mobile car for further questioning.
2
Accused Enojas voluntarily went with the police officers and left
his taxi behind. On reaching the 7-11 convenience store on the
Zapote-Alabang Road, however, they stopped and PO2
Pangilinan went down to relieve himself there. As he approached
the store’s door, however, he came upon two suspected robbers
and shot it out with them. PO2 Pangilinan shot one suspect dead
and hit the other who still managed to escape. But someone fired
at PO2 Pangilinan causing his death.
On hearing the shots, PO2 Gregorio came around and fired at an
armed man whom he saw running towards Pilar Village. He saw
another man, who came from the Jollibbee outlet, run towards
Alabang-Zapote Road while firing his gun at PO2 Gregorio. The
latter returned fire but the men were able to take a taxi and
escape. PO2 Gregorio radioed for help and for an ambulance. On
returning to his mobile car, he realized that accused Enojas, the
taxi driver they had with them had fled.
P/Insp. Ferjen Torred (Torred), the Chief of Investigation Division
of the Las Piñas Police, testified that he and PO2 Teoson
Rosarito (PO2 Rosarito) immediately responded to PO2
Gregorio’s urgent call. Suspecting that accused Enojas, the taxi
driver who fled, was involved in the attempted robbery, they
searched the abandoned taxi and found a mobile phone that
Enojas apparently left behind. P/Ins. Torred instructed PO3 Joel
Cambi (PO3 Cambi) to monitor its incoming messages. 3
The police later ascertained that the suspect whom PO2
Pangilinan had killed was someone named Reynaldo Mendoza
who was armed with a .38 caliber revolver. The police found
spent 9 mm and M-16 rifle shells at the crime scene. Follow-up
operations at nearby provinces resulted in finding the dead body
of one of the suspects, Alex Angeles, at the Metro South Medical
Center along Molino, Bacoor, Cavite. 4
PO3 Cambi and PO2 Rosarito testified that they monitored the
messages in accused Enojas’ mobile phone and, posing as
Enojas, communicated with the other accused. The police then
conducted an entrapment operation that resulted in the arrest of
accused Santos and Jalandoni. Subsequently, the police were
also able to capture accused Enojas and Gomez. The
prosecution presented the transcripts of the mobile phone text
messages between Enojas and some of his co-accused. 5
139
The victim’s father, Ricardo Pangilinan, testified that his son was
at the time of his death 28 years old, unmarried, and was
receiving police pay of ₱8,000.00 to ₱10,000.00 per month.
Ricardo spent ₱99,999 for burial expense, ₱16,000.00 for the
interment services, and ₱50,000.00 for purchase of the cemetery
lot.
6
Manifesting in open court that they did not want to adduce any
evidence or testify in the case,  the accused opted to instead file a
7
trial memorandum on March 10, 2008 for their defense. They
pointed out that they were entitled to an acquittal since they were
all illegally arrested and since the evidence of the text messages
were inadmissible, not having been properly identified.
On June 2, 2008 the RTC rendered judgment,  finding all the
8
accused guilty of murder qualified by evident premeditation and
use of armed men with the special aggravating circumstance of
use of unlicensed firearms. It thus sentenced them to suffer the
penalty of reclusion perpetua, without the possibility of parole and
to indemnify the heirs of PO2 Pangilinan with ₱165,999.00 as
actual damages, ₱50,000.00 as moral damages, ₱25,000.00 as
exemplary damages, and ₱2,080,000.00 as compensation for
loss of earning capacity.
Upon review in CA-G.R. CR-H.C. 03377, on June 14, 2012 the
Court of Appeals (CA) dismissed the appeal and affirmed in toto
the conviction of the accused.  The CA, however, found the
9
absence of evident premeditation since the prosecution failed to
prove that the several accused planned the crime before
committing it. The accused appealed from the CA to this Court. 10
The defense points out that the prosecution failed to present
direct evidence that the accused Enojas, Gomez, Santos, or
Jalandoni took part in shooting PO2 Pangilinan dead.  This may
11
be true but the prosecution could prove their liability by
circumstantial evidence that meets the evidentiary standard of
proof beyond reasonable doubt. It has been held that
circumstantial evidence is sufficient for conviction if: 1) there is
more than one circumstance; 2) the facts from which the
inferences are derived are proven; and 3) the combination of all
the circumstances is such as to produce a conviction beyond
reasonable doubt. 12
Here the totality of the circumstantial evidence the prosecution
presented sufficiently provides basis for the conviction of all the
accused. Thus:
1. PO2 Gregorio positively identified accused Enojas as
the driver of the taxicab suspiciously parked in front of the
Aguila Auto Glass shop. The officers were bringing him
with them to the police station because of the
questionable documents he showed upon query.
Subsequent inspection of the taxicab yielded Enojas’
mobile phone that contained messages which led to the
entrapment and capture of the other accused who were
also taxicab drivers.
2. Enojas fled during the commotion rather than remain in
the cab to go to the police station where he was about to
be taken for questioning, tending to show that he had
something to hide. He certainly did not go to the police
afterwards to clear up the matter and claim his taxi.
3. PO2 Gregorio positively identified accused Gomez as
one of the men he saw running away from the scene of
the shooting.
4. The text messages identified "Kua Justin" as one of
those who engaged PO2 Pangilinan in the shootout; the
messages also referred to "Kua Justin" as the one who
was hit in such shootout and later died in a hospital in
Bacoor, Cavite. These messages linked the other
accused.
140
5. During the follow-up operations, the police investigators
succeeded in entrapping accused Santos, Jalandoni,
Enojas, and Gomez, who were all named in the text
messages.
6. The text messages sent to the phone recovered from
the taxi driven by Enojas clearly made references to the
7-11 shootout and to the wounding of "Kua Justin," one of
the gunmen, and his subsequent death.
7. The context of the messages showed that the accused
were members of an organized group of taxicab drivers
engaged in illegal activities.
8. Upon the arrest of the accused, they were found in
possession of mobile phones with call numbers that
corresponded to the senders of the messages received
on the mobile phone that accused Enojas left in his
taxicab.13
The Court must, however, disagree with the CA’s ruling that the
aggravating circumstances of a) aid of armed men and b) use of
unlicensed firearms qualified the killing of PO2 Pangilinan to
murder. In "aid of armed men," the men act as accomplices only.
They must not be acting in the commission of the crime under the
same purpose as the principal accused, otherwise they are to be
regarded as co-principals or co-conspirators. The use of
unlicensed firearm, on the other hand, is a special aggravating
circumstance that is not among the circumstances mentioned in
Article 248 of the Revised Penal Code as qualifying a homicide to
murder.  Consequently, the accused in this case may be held
14
liable only for homicide, aggravated by the use of unlicensed
firearms, a circumstance alleged in the information.
As to the admissibility of the text messages, the RTC admitted
them in conformity with the Court’s earlier Resolution applying the
Rules on Electronic Evidence to criminal actions.  Text messages
15
are to be proved by the testimony of a person who was a party to
the same or has personal knowledge of them.  Here, PO3 Cambi,
16
posing as the accused Enojas, exchanged text messages with
the other accused in order to identify and entrap them. As the
recipient of those messages sent from and to the mobile phone in
his possession, PO3 Cambi had personal knowledge of such
messages and was competent to testify on them.
The accused lament that they were arrested without a valid
warrant of arrest.  But, assuming that this was so, it cannot be a
1âwphi1
ground for acquitting them of the crime charged but for rejecting
any evidence that may have been taken from them after an
unauthorized search as an incident of an unlawful arrest, a point
that is not in issue here. At any rate, a crime had been committed
—the killing of PO2 Pangilinan—and the investigating police
officers had personal knowledge of facts indicating that the
persons they were to arrest had committed it.  The text messages
17
to and from the mobile phone left at the scene by accused Enojas
provided strong leads on the participation and identities of the
accused. Indeed, the police caught them in an entrapment using
this knowledge.
The award of damages by the courts below has to be modified to
conform to current jurisprudence. 18
WHEREFORE, the Court MODIFIES the Court of Appeals
Decision of June 14, 2012 in CA-G.R. CR-HC 03377. The Court
instead FINDS accused-appellants Noel Enojas y Hingpit, Arnold
Gomez y Fabregas, Fernando Santos y Delantar, and Roger
Jalandoni y Ari GUILTY of the lesser crime of HOMICIDE with the
special aggravating circumstance of use of unlicensed firearms.
Applying the Indeterminate Sentence Law, the Court
SENTENCES each of them to 12 years of prision mayor, as
minimum, to 20 years of reclusion temporal, as maximum. The
Court also MODIFIES the award of exemplary damages by
increasing it to ₱30,000.00, with an additional ₱50,000.00 for civil
indemnity.SO ORDERED.
141
21. G.R. No. 198799
BANK OF THE PHILIPPINE ISLANDS, Petitioner 
vs
AMADO M. MENDOZA and MARIA MARCOS VDA. DE
MENDOZA, Respondents
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari  is the
1
Decision  dated February 4, 2011 and the Resolution  dated
2 3
August 26, 2011 of the Court of Appeals (CA) in CA-GR. CV No.
91704, which reversed and set aside the Decision dated May 9,
4
2007 of the Regional Trial Court of Gapan City, Nueva Ecija,
Branch 87 (RTC) in Civil Case No. 1913, and consequently,
dismissed the complaint filed by petitioner Bank of the Philippine
Islands (BPI) against respondents Amado M. Mendoza (Amado)
and his mother, Maria Marcos vda. de Mendoza (Maria;
collectively, respondents).
The Facts
This case stemmed from a Complaint for Sum of Money with
Application for Writ of Attachment  filed by BPI against
5
respondents before the RTC. BPI alleged that on April 8, 1997,
respondents: (a) opened a foreign currency savings account with
Account No. 0584-0007-08 (US savings account) at BPI-Gapan
Branch and deposited therein the total amount of US$l6,264.00,
broken down as follows: US$100.00 in cash and US$16,164.00 in
US Treasury Check with No. 3149-09693369 payable to "Ma.
Marcos Vda. de Mendoza" (subject check); and (b) placed the
amount of US$2,000.00 in a time deposit account. After the lapse
of the thirty (30) day clearing period on May 9 and 13, 1997,
respondents withdrew the amount of US$16,244.00 from the US
savings account, leaving only US$20.00 for bank
charges.  However, on June 26, 1997, BPI received a notice from
6
respondent less the amounts already recovered by BPI, plus legal
its correspondent bank, Bankers Trust Company New York interest of 12% per annum reckoned from the time the money
(Bankers Trust), that the subject check was dishonored due to was withdrawn; and (b) 10% of the aforesaid monetary award
"amount altered",  as evidenced by (1) an electronic mail (e-mail)
7
representing attorney's fees. 18

advice from Bankers Trust,  and (2) a photocopy of the subject

8

check with a notation "endorsement cancelled" by Bankers The RTC found that: (a) BPI duly notified respondents of the
Trust  as the original copy of the subject check was allegedly
9
dishonor of the subject check, thus, creating an obligation on the
confiscated by the government of the United States of America part of the respondents to return the proceeds that they had
(US government).  This prompted BPI to inform respondents of
10
already withdrawn; and (b) Amado unmistakably acknowledged
such dishonor and to demand reimbursement.  BPI then claimed
11
the same by executing a promissory note dated September 8,
that: (a) on July 18, 1997, respondents allowed BPI to apply the 1997 promising to pay BPI-Gapan Branch the amount of
proceeds of their time deposit account in the amount ₱l,000.00 monthly in connection with such obligation. In this
ofUS$2,015.00 to their outstanding obligation;  (b) upon the
12
regard, the RTC opined that since respondents withdrew the
exhaustion of the said time deposit account, Amado gave BPI a money prior to the dishonor and that BPI allowed such withdrawal
promissory note dated September 8, 1997 containing his promise by mistake, it is only proper that respondents return the proceeds
to pay BPI-Gapan Branch the amount of ₱l,000.00 of the same pursuant to the principle of solutio indebiti under
monthly;  and (c) when respondents failed to fulfill their obligation
13
Article 2154 of the Civil Code. 19

despite repeated demands, BPI was constrained to give a final

demand letter  to respondents on November 27, 1997.
14 15
Aggrieved, respondents appealed to the CA. 20

For their part, while respondents admitted the withdrawals and The CA Ruling
exchanged the same with BPI at the rate of ₱26.l59 per dollar,
they did not receive the amount of ₱582,140.00 from the
In a Decision  dated February 4, 2011, the CA reversed and set
21

proceeds. Respondents then maintained that Amado only affixed

aside the RTC's ruling, and consequently, dismissed BPI's
his signature in the letter dated July 18, 1997 in order to
complaint for lack of merit.  It held that BPI failed to prove the
22

acknowledge its receipt, but not to give his consent to the

application of the proceeds of their time deposit account to their
purported obligations to BPI. According to Amado, he would have
been willing to pay BPI, if only the latter presented proper and
authenticated proof of the dishonor of the subject check.
However, since the bank failed to do so, Amado argued that BPI
had no cause of action against him and his mother, Maria. 16
The RTC Ruling
dishonor of the subject check, since: (a) the presentation of a
mere photocopy of the subject check is in violation of the Best
Evidence Rule; and (b) the e-mail advice from Bankers
Trust was not properly authenticated in accordance with the
Rules on Electronic Evidence as the person who sent the e-mail
advice was neither identified nor presented in court. As such, the
CA ordered the dismissal of the complaint due to BPI's failure to
prove its claim against respondents. 23

In a Decision  dated May 9, 2007, the RTC ruled in BPI's favor,

17

and accordingly, ordered respondents to pay: (a) ₱369,600.5l

representing the peso equivalent of amounts withdrawn by

142
Dissatisfied, BPI moved for reconsideration,  which was,
24
however, denied in a Resolution  dated August 26, 2011; hence,
25
this petition.
The Issue Before the Court
The primordial issue for the Court's resolution is whether or not
the CA correctly dismissed BPI's complaint for sum of money
against respondents.
The Court's Ruling
The petition is meritorious.
As a general rule, the Court's jurisdiction in a petition for review
on certiorari under Rule 45 of the Rules of Court is limited to the
review of pure questions of law. Otherwise stated, a Rule 45
petition does not allow the review of questions of fact because the
Court is not a trier of facts.  Case law provides that "there is a
26
'question of law' when the doubt or difference arises as to what
the law is on a certain set of facts or circumstances; on the other
hand, there is a 'question of fact' when the issue raised on appeal
pertains to the truth or falsity of the alleged facts. The test for
determining whether the supposed error was one of 'law' or 'fact'
is not the appellation given by the parties raising the same;
rather, it is whether the reviewing court can resolve the issues
raised without evaluating the evidence, in which case, it is a
question of law; otherwise, it is one of fact."  Where there is no
27
dispute as to the facts, the question of whether or not the
conclusions drawn from these facts are correct is a question of
law. However, if the question posed requires a re-evaluation of
the credibility of witnesses, or the existence or relevance of
surrounding circumstances and their relationship to each other,
the issue is factual.
28
Notably, however, the foregoing general rule admits of several
exceptions, such as where the factual findings of the RTC and the
143
CA are conflicting or contradictory,  which is evident in this case.
29
As such, the Court is constrained to make its own factual findings
in order to resolve the issue presented before it.
To recapitulate, the RTC declared that BPI was able to sufficiently
establish by preponderance of evidence that respondents were
duly notified of the dishonor of the subject check, rendering them
liable to refund what they had withdrawn from BPI. Pertinently, it
hinged its ruling on the pieces of evidence presented during the
trial, namely: the e-mail printout advice from Bankers Trust
informing BPI that the subject check was dishonored, the BPI
letters dated June 27, 1997 and July 18, 1997 addressed to
respondents, and the subject promissory note voluntarily
executed by Amado. On the contrary, the CA held that
respondents were not liable to BPI for its failure to competently
prove the fact of the subject check's dishonor and its subsequent
confiscation by the US government. In this relation, the CA
deemed that the printout of the e-mail advice is inadmissible in
evidence for lack of proper authentication pursuant to the Rules
on Electronic Evidence.
After a judicious review of the records, including a re-evaluation
of the evidence presented by the parties, the Court is inclined to
sustain the findings of the RTC over that of the CA, as will be
explained hereunder.
It is settled that in civil cases, the party having the burden of proof
must produce a preponderance of evidence thereon, with plaintiff
having to rely on the strength of his own evidence and not upon
the weakness of the defendant's.  Preponderance of evidence is
30
the weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term
'greater weight of evidence' or 'greater weight of credible
evidence.'  Succinctly put, it only requires that evidence be
31
greater or more convincing than the opposing evidence. 32
Records evince that BPI was able to satisfactorily prove by
preponderance of evidence the existence of respondents'
obligation in its favor. Verily, Amado acknowledged its existence
and expressed his conformity thereto when he voluntarily: (a)
affixed his signature in the letters dated June 27, 1997  and July
33
18, 1997,  where he acknowledged the dishonor of the subject
34
check, and subsequently, allowed BPI to apply the proceeds of
their US time deposit account to partially offset their obligation to
the bank; and (b) executed a Promissory Note  dated September
35
8, 1997 wherein he undertook to pay BPI in installments of
₱l,000.00 per month until the remaining balance of his obligation
is fully paid.
On the other hand, aside from his bare testimony, Amado did not
present any corroborative evidence to support his claim that his
performance of the aforesaid voluntary acts was subject to BPI's
presentment of the proper and authenticated proof of the
dishonored subject check. Amado's unsubstantiated testimony is
self-serving at the most, and hence, cannot be relied upon.  In
36
fact, the RTC did not lend any credence to Amado's testimony in
resolving this case. In this regard, it should be borne in mind that
the "findings of the trial court on the credibility of witnesses
deserve great weight, as the trial judge is in the best position to
assess the credibility of the witnesses, and has the unique
opportunity to observe the witness firsthand and note his
demeanor, conduct and attitude under gruelling examination.
Absent any showing that the trial court's calibration of credibility
was flawed, the appellate court is bound by its assessment,"  as 37
in this case.
Overall, assessing the pieces of evidence presented by BPI as
opposed to the self-serving allegations of respondents, the weight
of evidence clearly preponderates in favor of the former.
Otherwise stated, BPI has proven by the required quantum of
proof, i.e., preponderance of evidence, respondents' obligation
towards it, and as such, respondents must be made to fulfill the
same.
In any event, the CA erred in concluding that BPI failed to prove
the dishonor of the subject check by merely presenting: (a) a
144
photocopy thereof with its dorsal portion stamped
"ENDORSEMENT CANCELLED" by Bankers Trust;  and (b) a 38
print-out of the e-mail advice from Bankers Trust stating that the
subject check was returned unpaid because the amount was
altered.39
Anent the subject check, while the Best Evidence Rule under
Section 3, Rule 130  of the Rules of Court states that generally,
40
the original copy of the document must be presented whenever
the content of the document is under inquiry, the rule admits of
certain exceptions, such as "[w]hen the original has been lost or
destroyed, or cannot be produced in court, without bad faith on
the part of the offeror."  In order to fall under the aforesaid
41
exception, it is crucial that the offeror proves: (a) the existence or
due execution of the original; (b) the loss and destruction of the
original, or the reason for its non-production in court; and (c) the
absence of bad faith on the part of the offeror to which the
unavailability of the original can be attributed. 
42
In this case, BPI sufficiently complied with the foregoing
requisities. First, the existence or due execution of the subject
check was admitted by both parties. Second, the reason for the
non-presentation of the original copy of the subject check was
justifiable as it was confiscated by the US government for being
an altered check. The subject check, being a US Treasury
Warrant, is not an ordinary check, and practically speaking, the
same could not be easily obtained. Lastly, absent any proof to
the contrary and for the reasons already stated, no bad faith can
be attributed to BPI for its failure to present the original of the
subject check. Thus, applying the exception to the Best Evidence
Rule, the presentation of the photocopy of the subject check as
secondary evidence was permissible.
As to the e-mail advice, while it may not have been properly
authenticated in accordance with the Rules on Electronic
Evidence, the same was merely corroborative evidence, and
thus, its admissibility or inadmissibility should not diminish the
probative value of the other evidence proving respondents'
obligation towards BPI, namely: (a) Amado's voluntary acts of the damages and attorney's fees awarded, if any, computed from
conforming to BPI's letters dated June 27, 1997 and July 18, the time of demand until its satisfaction.  Consequently,
48

1997 and executing the promissory note to answer for such
obligation; and (b) the photocopy of the subject check, which
presentation was justified as falling under the afore-discussed
exception to the Best Evidence Rule. As such, their probative
value remains.
respondents must return to BPI the aforesaid amount, with legal
interest at the rate of six percent (6%) per annum from the date of
extrajudicial demand - or on June 27, 1997, the date when BPI
informed respondents of the dishonor of the subject check and
demanded the return of its proceeds - until fully paid.

Besides, it should be pointed out that respondents did not proffer
any objection to the evidence presented by BPI, as shown by
their failure to file their comment or opposition to the latter's
formal offer of evidence.  It is well-settled that evidence not
43
objected to is deemed admitted and may validly be considered by
the court in arriving at its judgment, as what the RTC did in this
case, since it was in a better position to assess and weigh the
evidence presented during the trial. 44
In sum, considering that BPI had proven its cause of action by
preponderance of evidence, the Court finds the CA to have erred
in dismissing BPI's complaint against respondents. Accordingly,
the RTC ruling must be reinstated, subject to modification in the
award of interest imposed on the adjudged amount.
WHEREFORE, the petition is GRANTED. The Decision dated
February 4, 2011 and the Resolution dated August 26, 2011 of
the Court of Appeals in CA-G.R. CV No. 91704 is
hereby REVERSED and SET ASIDE. The Decision dated May 9,
2007 of the Regional Trial Court of Gapan City, Nueva Ecija,
Branch 87 in Civil Case No. 1913
is REINSTATED with MODIFICATION, adjusting the interest
imposed on the amount ordered to be
returned, i.e., ₱369,600.51, to six percent (6%) per
annum reckoned from the date of extrajudicial demand on June
27, 1997, until fully paid.
SO ORDERED.

To recount, respondents were ordered by the RTC to pay BPI the

amount of ₱369,600.51 representing the peso equivalent of the
amounts withdrawn by respondents less the amounts already
recovered by BPI, plus legal interest of twelve percent (12%) per
annum reckoned from the time the money was withdrawn,  thus,
45

implying that such amount was a loan or a forbearance of money.

However, records reveal that BPI's payment of the proceeds of
the subject check was due to a mistaken notion that such check
was cleared, when in fact, it was dishonored due to an alteration
in the amount indicated therein. Such payment on the part of BPI
to respondents was clearly made by mistake, giving rise to the
quasi-contractual obligation of solutio indebiti under Article
2154  in relation to Article 2163  of the Civil Code. Not being a
46 47

loan or forbearance of money, an interest of six percent (6%) per

annumshould be imposed on the amount to be refunded and on

145
 22.

146