COMPANIA MARITIME V LIMSON (PATAJO, J.

, 1986)
1
Facts:

Compania filed a complaint against Limson for collection of the sum of

P44,701.54,which is the unpaid accounts for passage and freight on
shipment of hogs, cattle andcarabaos abroad Companias vessel.

Limson denied liability claiming that he was not the shipper nor had he
authorizedsaid shipments. He further set up a counterclaim for the refund of
the rebate he wasentitled to pursuant to their agreement.

The Court appointed a commissioner to examine the accounts involved

beforeproceeding with the hearing.

The Report indicated that Limsons claim amounted to P676,416.05,

andCompanias claim to P545,394.24. Companias claim was based among
others onseveral bills signed by one Perry with Limson as the shipper and
consignee, andsome for others as shippers and consignee.

CFI:
Ruled that Perry was not Limsons authorized representative. Thus,
he wasnot liable for the bills of lading not signed by him or his authorized
representatives.
G.R. No. L-27134 February 28, 1986
COMPANIA MARITIMA, plaintiff-appellant, vs. JOSE C. LIMSON,
defendant-appellant.
PATAJO, J.:

been duly authorized by defendant to make said shipments. Defendant

further set up a counterclaim for the refund of the rebate to which he was
entitled to pursuant to an agreement that he had with plaintiff for shipments
made by him from Davao, Cotabato, Dadiangas, Iligan and Masbate and for
cost of foodstuffs sold or delivered to plaintiff in the total amount of
P411,477.45.
The bills examined by the Commissioner had been classified and regrouped
by him into (1) original bills of lading signed by defendant or his agent; (2)
original bills of lading without signature of defendant or his agent; and (3)
charges with no original bills of lading, to wit:
(1) Original bills of lading duly signed by
defendant or his agent.................... P68,209.76
(2) Original bills of lading without
the signature of defendant............ 310,317.21
(3) No original bills of lading............... 166,867.28
Said Commissioner recommended that only the amount of
P68,209.76 supported by original bills of lading signed by defendant or his
agent is properly chargeable to defendant.
After hearing the lower Court rendered judgment based principally
on the report of the Commissioner. The Court, however, held that defendant
was liable for the bills of lading without originals involving a total of
P166,867.26 but liable on the bills of lading which had not been signed by
him or his authorized representative.

Facts:

Held: No!
We find merit in the contention of plaintiff that the respondent Court
correctly held defendant liable for said amount because the same actually
represented freight charges based on the carbon originals of the ship's copy
of the bills of lading where Limson appeared as consignee in the amount of
P84,529.42 and those based on the ship's cargo manifests, where defendant
appeared as consignee in the amount of P81,874.10. Respondent Court
admitted in evidence said copies of the bills of lading which were not
considered by the Commissioner because they are not actually the original
copy of the bill of lading. The Commissioner accepted only the originals of
the bills of lading because he did not consider even duplicate originals duly
signed as originals. The ship's copies of the bills of lading and the cargo
manifests were substantiated by other supporting documents which were
found after the report of the Commissioner from among the records
salvaged from the San Nicolas bodega fire or which were found among the
records kept on plaintiff's terminal office. Said documents were presented in
lieu of corresponding original of the consignee's copy of bill of lading which
could not be submitted to the Commissioner nor presented as plaintiff's
evidence to the Court because they were lost or destroyed during the
remodelling of plaintiff's office building or during the fire at plaintiff's bodega
at San Nicolas where they were brought for safekeeping. All said documents
were presented as evidence to prove that all the freight charges for the

Plaintiff Compania Maritima filed a complaint against defendant Jose

C. Limson for collection of the sum of P44,701.54 representing the balance
of defendant's unpaid accounts for passage and freight on shipments of
hogs, cattle and carabaos abroad plaintiff's vessel from various ports of
Visayas and Mindanao. Attached to said complaint was the statement of
account supporting plaintiff's claim for unpaid passage and freight.
Defendant filed a motion for bill of particulars asking that plaintiff attach to
the complaint the bins of lading referred to in said statement of account in
order to enable defendant to answer plaintiff's complaint. Plaintiff opposed
said motion. The Court however ordered plaintiff to attach photostat copies
of the bills of lading upon which the statement of account was based.
Plaintiff's motion for reconsideration of said order was denied by the Court
but upon motion of plaintiff said order was modified to allow plaintiff to
attach duplicate originals of the bills of lading instead of photostat copies
thereof.
Defendant filed his answer to the complaint denying any liability to
plaintiff. Defendant alleged that he had already fully paid for all the
shipments he made and that a number of the bills of lading submitted by
plaintiff as basis of its claim are not properly chargeable to defendant since
he was not the shipper nor had he authorized said shipments which were
made by parties other than those for whom defendant is liable or who had

Issue:
WON Court a quo erred in declaring defendant liable in the amount of
P166,867.28 which represents charges for freight where the originals of the
bills of lading were not submitted

shipments evidence thereby were duly earned by plaintiff and were properly
debited in defendant's charge account. Apparently, the Commissioner
rejected plaintiff's claims which were not actually supported by the original
of the bills of lading notwithstanding the fact that duplicate original of the
said documents and other secondary evidence such as the ship cargo
manifests have been presented as evidence. As stated above, witnesses
Cabling and Ilagan testified that the practice was that when the originals of
the bins of lading could not be surrendered because they have not yet been
received by the consignee, the delivery of the cargo was nevertheless
authorized and a delivery receipt was prepared on the basis of the ship's
cargo manifests or the ship's copy of the bills of lading. This only shows
that the ship's cargo manifests or the ship's copy of the bills of
lading can be accepted as evidence of shipments made by defendant
since he was allowed to accept delivery of said shipments even
without presented his copy of the bill of lading.
1.

People vs. Tan

G.R. No. L-14257. July 31,
1959
Facts: Pacita Madrigal-Gonzales and her co-accused were charged with the
crime of falsification of public documents, in their capacities as public
officials and employees, for having made it appear that certain relief
supplies and/or merchandise were purchased by Gonzales for distribution to
calamity indigents, in such quantities and at such prices, and from such
business establishments or persons as written in said public documents. The
truth was, no such distributions of such relief and supplies as valued and as
supposedly purchased had ever been made.

The prosecution presented as evidence a booklet of receipts from the Metro

Drug Corporation in Magallanes, Cebu City. Said booklet contained triplicate
copies, the original invoices of which were sent to the companys Manila
office, the dupicates given to customers, and the triplicates left attached to
the booklet. One of the Metro Drugs salesmen who issued a receipt further
explained that, in preparing receipts for sales, two carbon copies were used
between the three sheets, so that the duplicates and the triplicates were
filed out of the use of the carbons in the course of the preparation and
signing of the originals.

The trial court judge, Hon. Bienvenido Tan, interrupted the proceeding,
holding that the triplicates were not admissible unless it was proven that the
originals were lost and cannot be produced. Another witness was presented,
and he alleged that the former practice of keeping the original white copies
no longer prevails as the originals are given to the customers, while only the
duplicates are submitted to the Manila office.

Issue: Are the triplicates of the receipts admissible as evidence?

Held: Yes. Under the law on evidence, the best evidence rule is that rule
which requires the highest grade of evidence obtainable to prove a disputed
fact. The admissibility of duplicates or triplicates under this rule has long
been settled. 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, produced 2
facsimile upon the sheets beneath, such signatures 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.

Doctrine: The best evidence rule is that rule which requires the highest
grade of evidence obtainable to prove a disputed fact. Carbon copies,
however, when made at the same time and on the same machine as the
original, are duplicate originals, and have been held to be as much primary
evidence as the originals.
1.

Compania Maritima vs. Allied Free Works Union G.R. No. L-28999.
May 24, 1977
Facts: On August 11, 1952, the Compaia Maritima and the Allied Free
Workers Union entered into a written contract whereby the union agreed to
perform arrastre and stevedoring work for Compaia Maritimas vessels at
Iligan City. The contract was to be effective for one month. The company
could revoke the contract before its expiration if the union failed to render
proper service, and it could be renewed by agreement of the parties. The
company would also not be liable for the payment of the services of the
union for the loading, unloading and delivery of cargoes, which should be
paid for by the owners and consignees of the cargoes.

The shippers and consignees paid the union only for the arrastre work
(handling and hauling of cargo on the wharf or between the establishment
of the consignee or shipper and the ships tackle), but refused to pay for the
stevedoring service (handling of the cargo in the holds of the vessel or
between the ships tackle and the holds of the vessel). They claimed that
the shipowner was the one obligated to pay for the stevedoring service
because the bill of lading provided that the unloading of the cargo was at
the shipowners expense. However, the company refused to pay for the
stevedoring service on the basis of the contract. As the union workers were
in dire need of work, the contract was not terminated, and was verbally
renewed upon its expiration.

The union requested recognition as the exclusive bargaining unit, but was
denied. Hence, the union filed with the CIR a petition for certification. The
company terminated the contract and entered into a new stevedoring
contract with Iligan Stevedoring Association. The union filed an Unfair Labor
Practice suit and picketed the wharf to prevent the Iligan Stevedoring from
performing the arrastre and stevedoring work. The company then sued the
union, and the trial court awarded in favor of the company actual damages
and other damages based on auditors reports showing alleged losses
sustained by the company due to the acts of the union members. The union
assailed the admissibility of said reports, alleging that they were hearsay
evidence.

Issue: Were the auditors reports admissible in evidence as proof of the

original records, books of accounts, reports or the like?
Held: No. The exception to the best evidence rule, which states that when
the original consists of numerous accounts or other documents which cannot
be examined in court without great loss of time and the fact sought to be
established from them is only the general result of the whole, the original
writings need not be produced, cannot be applied in this case. The
voluminour character of the records on which the accountants reports were
based was not duly established. Moreover, in order for said rule to be
applied, the records and accounts should be made accessible to the adverse
party so that the correctness of the summary may be tested on crossexamination.

The general rule is that an audit made by or the testimony of a private

auditor is inadmissible in evidence as proof of the original records, books of
accounts, reports or the like. The company failed to show the difficulty or
impossiblity of producing the records in court and their examination and
analysis as evidence by the court.

Doctrine: The general rule is that an audit made by or the testimony of a

private auditor is inadmissible in evidence as proof of the original records,
books of accounts, reports or the like, unless it is proved that there would
be difficulty or impossibility in producing the records in court and the
examination and analysis thereof.

1.

Provincial Fiscal of Pampanga vs. Reyes G.R. No. 35366. August 5,

1931
Facts: The provincial fiscal of Pampanga filed two informations for libel
against Andres Guevarra, alleging that the latter, with malicious intent,
published on page 9 of the July 13, 1930 issue of the weekly paper Ing
Magumasid a sqib in verse, of which a Spanish translation was included,

intended to impeach the honesty, integrity and reputation of Clemente

Dayrit and of Mariano Nepomuceno. The criminal cases were set for a joint
trial.

As evidence, the fiscal attempted to present copies of the Ing Magumasid

issue which contained the libelous article with the innuendo, another article
in the vernacular published in the same weekly, and its translation into
Spanish. The trial court held the copies as inadmissible, saying that,
inasmuch as the libelous articles were not quoted in the information, said
evidence cannot be admitted without amending the information. The court
denied the petition to amend the information on the ground that it would
impair the rights of Guevarra, holding that the omission of the libelous
article in the original was fatal to the prosecution.

Issue: Are the copies of the weekly where the libelous article was published
the best evidence of the crime of libel?

Held: Yes. The general rules regarding admissibility of evidence are

applicable to cases of libel or slander. The evidence must be relevant, and
not hearsay. This being so, the rule of procedure which requires the
production of the best evidence, is applicable to the present case. 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 a published article.

Doctrine: The general rules regarding admissibility of evidence are

applicable to cases of libel or slander. The copies of the weekly where the
libelous article was published, and its translation, constitute the best
evidence of the libel charged.

RENATO LAZATIN alias RENATO STA. CLARA vs. HONORABLE JUDGE

JOSE C. CAMPOS, JR., NORA L. DE LEON, BERNARDO DE LEON,
ARLENE DE LEON and IRMA L. VELOSO
G.R. No. L-43955-56 July 30, 1979
TEEHANKEE, J.:
Facts: On January 13, 1974, Dr. Mariano M. Lazatin died intestate in Pasay
City, survived by his wife, Margarita de Asis, and his adopted twin
daughters, respondent Nora L. de Leon, married to respondent Bernardo de
Leon, and respondent Irma Lazatin, married to Francisco Veloso.

One month after Mariano's death, his widow, Margarita de Asis, commenced
an intestate proceeding before the Court of First Instance of Pasay.
Two months after or on April 11, 1974, the widow, Margarita de Asis, also
died, leaving a holographic will executed on May 29, 1970, providing,
among others, for a legacy of cash, jewelry, and stocks to respondent
Arlene de Leon, a granddaughter; a legacy of support to Rodolfo Gallardo, a
son of her late sister; and a legacy of education to Ramon Sta. Clara, son of
petitioner Renato Lazatin alias Renato Sta. Clara.
During her lifetime, Margarita de Asis kept a safety deposit box at the
People's Bank and Trust Company, Roxas Boulevard branch, which either
she or respondent Nora L. de Leon could open. Five days after Margarita's
death, respondent Nora L. de Leon, accompanied by her husband,
respondent Bernardo de Leon, opened the safety deposit box and removed
its contents: (a) shares of stock; (b) her adoption papers and those of her
sister, respondent Irma L. Veloso; and (c) jewelry belonging to her and to
her mother. Respondent Nora L. de Leon claims that she opened the safety
deposit box in good faith, believing that it was held jointly by her and her
deceased mother. Her sole reason for opening the box was to get her stock
certificates and other small items deposited therein. When she was to close
the deposit box, the bank personnel informed her that she needed an
authority from the court to do so, in view of her mother's death and so, she
removed everything from the box.
On August 20, 1975, petitioner Renato to Lazatin alias Renato Sta. Clara
filed a motion to intervene in the estate of Margarita de Asis, Sp. Proc. No.
2341-P, as an adopted child, on the basis of an affidavit executed by
Benjamin Lazatin, brother of the deceased Dr. Mariano M. Lazatin, the
petitioner was an "illegitimate son" of Dr. Lazatin and was later adopted by
him. This affidavit was later modified on August 19, 1975 to state that
petitioner was adopted by both Mariano M. Lazatin and his wife Margarita de
Asis.
Respondent court heard petitioner's motion to intervene as an adopted son
in the estate of Margarita de Asis, Sp. Proc. No. 2341-P, at which hearings
petitioner presented no decree of adoption in his, favor. Instead, petitioner
attempted to prove, over private respondents' objections, that he had
recognized the deceased spouses as his parents; he had been supported by
them until their death; formerly he was known as "Renato Lazatin" but was
compelled to change his surname to "Sta. Clara" when the deceased
spouses refused to give consent to his marriage to his present wife; that at
first, he and his wife stayed at the residence of Engracio de Asis, father of
Margarita, but a few months later, they transferred to the Mercy Hospital at
Taft Avenue, Manila, owned by the deceased spouses, where they
continuously resided up to the present. Photographs were also intended to
be presented by petitioner, e.g., photograph of Irma Veloso where she
addressed herself as sister of petitioner; photograph of deceased Margarita
de Asis and petitioner when he was a boy; document showing that
petitioners real name is "Renato Lazatin." 1

On March 4, 1976, respondent court barred the introduction of petitioner's

evidence because:
All the evidence submitted by Renato and Ramon Sta. Clara
through their counsel do not prove or have no tendency to prove
the existence of any judicial proceeding where the adoption of the
parties above named were taken up by any court. Neither do the
evidence tend to establish the presence of any record of a
proceeding in court where the adoption of the above named persons
was held.
On June 3,1976, respondent court, ruling on petitioners motion for definite
resolution on his previous n declare as established the fact of adoption,
issued the ff order:
As far as the case of Renato Sta. Clara is his Petition to
establish his status as an adopted child, The Court has ruled that he
has failed to establish such status. The any motion for
reconsideration unless based on some documentary proof.
Issue: Whether or not the fact of adoption may be proved by other
evidence even if the original document of adoption is unavailable.
Held: The absence of a record of adoption has been said to evolve a
presumption of its non-existence. 7 Where, under the provisions of the
statute, an adoption is effected by a court order, the records of such court
constitute the evidence by which such adoption may be established. 8
Petitioner's proofs do not show or tend to show that at one time or another
a specific court of competent jurisdiction rendered in an adoption proceeding
initiated by the late spouses an order approving his adoption as a child of
the latter. No judicial records of such adoption or copies thereof are
presented or attempted to be presented. Petitioner merely proceeds from a
nebulous assumption that he was judicially adopted between the years 1928
and 1932. By what particular court was the adoption decreed or by whom
was the petition heard, petitioner does not even manifest, much less show.
There are no witnesses cited to that adoption proceeding or to the adoption
decree.
The absence of proof of such order of adoption by the court, as provided by
the statute, cannot be substituted by parol evidence that a child has lived
with a person, not his parent, and has been treated as a child to establish
such adoption. 9 Even evidence of declaration of the deceased, made in his
lifetime, that he intended to adopt a child as his heir, and that he had
adopted him, and of the fact that the child resided with the deceased, as a
member of his family, from infancy until he attained his majority, is not
sufficient to establish the fact of adoption. 10Nor does the fact that the
deceased spouses fed, clothed, educated, recognized and referred to one
like petitioner as an adopted child, recognized and referred to one like
petitioner as an adopted child, necessarily establish adoption of the
child. 11 Withal, the attempts of petitioner to prove his adoption by acts and
declarations of the deceased do not discharge the mandatory presentation
of the judicial decree of adoption. The thrust of petitioner's evidence is

rather to establish his status as an admitted illegitimate child, not an

adopted child which status of an admitted illegitimate child was the very
basis of his petitioner for intervention in the estate proceedings of the late
Dr. Lazatin, as above stated. (Supra, at page 3 hereof)
Secondary evidence is nonetheless admissible where the records of adoption
proceedings were actually lost or destroyed. But, prior to the introduction of
such secondary evidence, the proponent must establish the former
existence of the instrument. The correct order of proof is as follows:
Existence; execution; loss; contents; although this order may be changed if
necessary in the discretion of the court. 16 The sufficiency of the proof
offered as a predicate for the admission of an alleged lost deed lies within
the judicial discretion of the trial court under all the circumstances of the
particular case. 17 As earlier pointed out, petitioner failed to establish the
former existence of the adoption paper and its subsequent loss or
destruction. Secondary proof may only be introduced if it has first beer.
established that such adoption paper really existed and was lost. This is
indispensable. 18 Petitioner's supposed adoption was only testified to by him
and is allegedly to be testified to a brother of the deceased Mariano M.
Lazatin or others who have witnessed that the deceased spouses treated
petitioner as their child. If adoption was really made, the records thereof
should have existed and the same presented at the hearing or subsequent
thereto or a reasonable explanation of loss or destruction thereof, if that be
the case, adduced. 19
ACCORDINGLY, the petition is dismissed and the questioned orders denying
petitioner's petition below "to declare as established in this proceeding the
fact of [his] adoption" are hereby affirmed. The temporary restraining order
issued on June 16, 1976 and amended on July 21, 1976 is ordered lifted,
effective immediately. Without costs.
SO ORDERED.
E. MICHAEL & CO., INC. vs. ADRIANO ENRIQUEZ
G.R. No. L-10824
December 24, 1915
MORELAND, J.
Facts: This is an appeal from a judgment of the Court of First
Instance of Cebu dismissing the action after trial on the ground that
the plaintiff did not prove facts sufficient to constitute a cause of
action. 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., sociedad en
comandita, of which appellant claims to be the successor, by 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
instruments. 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 the
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.
Issue: whether or not the trial court erred in dismissing the case
Held: yes. 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 by a
recital of its contests in some authentic document, or by the recollection of a
witness."
As will be seen from this section, the writing itself must be produced unless
it has been lost or destroyed in which case, before its contents may be
proved by other 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
acknowledged, 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 instruments 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
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. 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 give 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 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.
Objections were sustained by the trial court to several question put by
appellants counsel relative to the due execution 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 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 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 question, or the property
and business of E. Michael & Co., sociedad en comandita, the appellant.
Having obtained an affirmative answer to the question 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.
We are of the opinion on the whole record that proper questions, tending to
the production of very material and competent evidence, were put by
plaintiff's counsel, objections to which were sustained by the trial court; and
that the error thus committed was not cure by subsequent questions and
answers or by the introduction of the same evidence in different manner or
form.
G.R. No. L-23893
October 29, 1968
VILLA REY TRANSIT, INC. vs. EUSEBIO E. FERRER
ANGELES, J.:
FACTS: Prior to 1959, Jose M. Villarama was an operator of a bus
transportation, under the business name of Villa Rey Transit, operating a
total of 32 units on various routes or lines from Pangasinan to Manila, and
vice-versa. On January 8, 1959, he sold his two certificates of public
convenience (CPCs) to Pantranco, 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 sale, apply for any TPU service identical or competing
with the buyer." Barely three months thereafter, a corporation called Villa
Rey Transit, Inc. (Corporation) was organized; Natividad R. Villarama (wife
of Jose M. Villarama) was one of the incorporators; the balance was
subscribed by the brother and sister-in-law of Jose M. Villarama. In less
than a month after its registration with the SEC, the Corporation
bought five CPCs, forty-nine buses, tools and equipment from one Valentin
Fernando. The parties immediately applied with the PSC for its approval of
the contract of sale. Before the PSC could take final action on said
application for approval of sale, however, the Sheriff of Manila levied on two
of the five certificates of public convenience involved therein, pursuant to a
writ of execution issued by the CFI of Pangasinan, in favor of Eusebio Ferrer,
plaintiff, judgment creditor, against Valentin Fernando, defendant, judgment
debtor. A public sale was conducted by the Sheriff of the said two CPCs.
Ferrer was the highest bidder, and a certificate of sale was issued in his

name. Thereafter, Ferrer sold the two CPCs to Pantranco, and jointly
submitted for approval their corresponding contract of sale to the PSC.
The Corporation filed in the CFI of Manila, a complaint for the annulment of
the sheriff's sale of the aforesaid two CPCs in favor of the defendant Ferrer,
and the subsequent sale thereof by the latter to Pantranco, against Ferrer,
Pantranco and the PSC. Pantranco 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."
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 the name of the Corporation, were
presented by Pantranco as evidence. Villarama 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 photostatic
copies thereof.
ISSUE: Whether the photostatic copies of ledger entries and vouchers are
admissible.
HELD: YES. 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. Villarama has practically admitted the second
and fourth requisites. As to the third, he admitted their previous existence
in the files of the Corporation and also that he had seen some of
them. 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. 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." 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.
ature: Automatic review of RTC Bataan decision
?
Jan. 3, 1995: while 3-yr old Lizette Arabelle Gonzales was
defecating at their neighbors backyard, a certain Manuel Boy Pruna called
him & placed her on his lap. Boy was then under the bridge, sniffing rugby &
drinking alcohol w/some friends. Boy later on brought her to a grassy area &
raped her. Boy was later on arrested.
?
Boys counsel filed a motion to put him under psychiatric/mental
exam claiming that he couldnt get a coherent answer from the accused. But
the Natl Center for Mental Health issued a certification that he was in fair
condition.
?
Prosecution witnesses:
1.
Jacqueline Gonzales Lizettes mom who claims that she was
fetching water from the artesian well when incident happened. She claims
she saw Lizette crying & the girl then narrated to her what happened &
pulled her to Boys house however accused was not home.
2.
Lizette testified that she knew the accused & that he inserted his
penis into her vagina as she was laid down in a grassy area. She likewise
testified that she knew that it was sin to tell a lie.
3.
Dr. Emelita Quiroz OG-Gyne who examined Lizette testified that
girls vagina was positive for sperm cells w/c signified that sexual
intercourse took place.
4.
Teresita Magtanob, med tech, corroborated Quiroz findings re
sperm cells
5.
SPO2 Romeo Bunsoy, PNP member on duty when Lizette reported
incident. He conducted an ocular inspection of the alleged place of incident
& discovered that grasses were flattened. People in nearby areas likewise
testified that they saw Boy bring Lizette in that area.
?
Defense witnesses:
1.
Carlito Bondoc testified that Boy was at home during the time the
incident occurred because he & Carlito were having coffee.
2.
Boy denied having raped the girl. Alibi: he was in his house
preparing coffee for Carlito.
?
RTC: convicted of qualified rape sentenced to death, thus automatic
review.
Issues & Ratio:
1.
WON Lizette is a competent & credible witness considering that she
was only 3 when raped & 5 during trial
?
YES. Gen rule when a witness takes a stand is to presume that hes
competent. Burden: upon party objecting to competency to establish
ground of incompetency.
?
Sec. 21, Rule 130, Rules on Evidence (ROE): kids whose mental
maturity render them incapable of perceiving the facts respecting w/c
theyre examined & relating them truthfully are disqualified to be witnesses.
No precise minimum age is fixed.
?
Test of competency: Intelligence not age. As long as child can
perceive & make known his perception to other & that hes capable of
relating truthfully facts for w/c hes examined. Consider childs capacity : to
receive correct impressions during incident; to comprehend obligation of an

oath; relate to those facts truthfully to the court at the time hes offered as
a witness. Kid should understand the punishment w/c may result fr false
swearing.
?
Determined by sound discretion of the court & such is respected
unless found erroneous. In this case, Boy failed to discharge burden of
proving Lizettes mental immaturity. RTC held that kid had capacity of
observation, recollection & communication & that she could discern the
consequence of telling a lie. Two years lapse since time of incident is
immaterial considering that its a most nat. reaction for victims of criml
violence to have a lasting impression of how crime was committed & identity
of aggressor.
2.
WON Jacquelines testimony is hearsay
?
NO. Not covered by hearsay rule, Sec. 36, Rule 130, ROE w/c
provides that a witness can testify only to those facts w/c he knows of his
personal knowledge except as otherwise provided by the ROC.
?
Hearsay: evidence not founded upon personal knowledge of witness
but rather on facts learned from a 3rd person not sworn as a witness to
those facts, w/c testimony is inadmissible. Excluded because theres no
chance for Court to cross-examine alleged source of info & to test his
credibility.
?
Not applicable in this case considering that source of info (Lizette)
was actually sworn in & cross-examined. Court had the chance to observe
her manner of testifying. Besides, Jacquelines testimony merely
corroborated Lizettes testimony. Kids testimony is sufficient to convict Boy.
3.
WON Gloria Tolentino should still be presented as a witness
?
NO. Tolentino listed as witness who saw accused carrying & bringing
kid to grassy area at the back of her house.
?
No need coz she already moved out, besides, her testimony would
only be corroborative of kids testi.
4.
WON prosecutions evidence was sufficient to convict accused
?
YES. Victim spontaneously identified accused as rapist.
?
Kids immediate revelation to her mom of the crime.
?
Kid led her mom to accuseds house right after the incident
?
Prompt filing of complaint before the authorities
?
Victims submission to medical examination
?
Hyperemia in kids private part
?
Presence of sperm cells in kids vaginal canal & urine.
?
Alibi not accepted considering that his alleged location did not make
it physically impossible for him to be at the crime scene during the time
crime was committed. Alibi cannot prevail over the positive identification of
victim. Esp since alibi was only corroborated by accuseds friend.
5.
WON Lizettes minority was properly established & imposition of
death penalty is proper YES
?
YES. RPC Art. 335, par. 7, no. 4, amended by RA No. 7659: death
penalty shall be imposed if crime of rapes committed to a kid below 7 yrs
old. Minority must be proved w/equal certainty & clearance as crime itself.
Failure to prove such would bar conviction for qualified rape.
?
Best proof of age would be the birth certificate. But Court has
conflicting pronouncements as to WON such is a condition sine qua non to
prove ones age to appreciate minority as an element of the crime or as a
qualifying circumstance. Some cases wherein no birth certificate was

presented ruled that the victims age was not proven. (see pp. 599-603 for
list of cases cited) In some instances, mere pronouncement of age was
considered as hearsay. On the other hand SC held in some cases that age
was sufficiently established despite failure of prosecution to present the
birth certificate.
?
Court now sets guidelines in appreciating age either as an element
of crime or a qualifying circumstance:
1.
Best evidence: original/certified true copy of the certificate of live
birth of part.
2.
absence of such: similar authentic records such as baptismal cert &
school records showing date of birth would be sufficient.
3.
If documents were lost, destroyed or unavailable, clear & credible
testimony of victims mom or other family members either by
affinity/consanguinity qualified to testify re pedigree such as exact age/date
of birth of victim pursuant to Sec. 40, Rule 130, ROE shall be sufficient
under ff conditions:
a.
victims alleged to be below 3 & seek to prove that shes below 7.
b.
victims alleged to be below 7 & seek to prove that shes below18.
c.
victims alleged to be below 12 & seek to prove that shes below 18.
4.
Absence of aforementioned, victims testimony will suffice as long as
such is clearly & expressly admitted.
5.
Prosecution has burden of proof of proving victims age. Accuseds
failure to object to the testimonial evidence shall not be taken against him.
6.
Trial court should always make a categorical finding as to the
victims age.
?
In this case, RTC based its decision on medico-legal findings & fact
that defense did not contest kids age & even questioned her tender age.
Former does not establish childs age. It doesnt even mention childs age.
Only testimonial evidence presented to establish childs age was Moms
testimony. Victims testimony was conflicting for although she claimed to be
5 yrs old at the time, she also testified that she was already 5 during the
time she was raped. Note that 2 years have lapsed between the time of the
incident & the hearing.
?
In convicting accused of qualified rape & sentencing him to death,
impt to establish that Lizette was indeed below 7 yrs old at the time of the
commission of crime. However, due to uncertainty of her age, corroborative
evidence (pertinent documents) should be presented to appreciate the
qualifying circumstance of rape. Lack of objection from defense as to
victims age does not discharge prosecution of its burden.
?
Testimony of Lizettes mom: sufficient to hold accused liable for
statutory rape/rape of girl below 12. RPC Art. 335 amended by RA 7659
provides that such is punishable w/RP, thus sentence is lowered from death
to RP. P50k indemnity + P50k moral damages.
Held: Guilty beyond reasonable doubt. RTC modified.
Ong Ching Po vs. Court of Appeals, 239 SCRA 341; GR No. 113472,
December 20, 1994
Posted by Pius Morados on November 28, 2011

(Land Titles and Deeds Aliens disqualified from acquiring public and
private lands)
Facts: Petitioner and respondent disputed over a parcel of land. Respondent
contends that she bought the said land from a certain Ong Joi Jong,
evidenced by a notarized deed of sale; and entrusted the administration of
the same to petitioner, a Chinese citizen and the brother of respondents
husband. Petitioner on the other hand claims that she bought the disputed
land from the same vendor and the sale is evidenced by a photocopy of a
deed of sale.
Issue: WON an alien may acquire lands in the Philippines by virtue of a
Deed of Sale.
Held: No. Whether or not said deed of sale is genuine, the Constitution
provides that aliens, whether individuals or corporations, have been
disqualified from acquiring public lands, hence disqualified also in acquiring
private lands.
The capacity to acquire private land is made dependent upon the capacity to
acquire or hold lands of the public domain. Private land may be transferred
or conveyed only to individuals or entities qualified to acquire lands of the
public domain.

G.R. Nos. 113472-73 December 20, 1994ONG CHING PO, YU SIOK LIAN
DAVID ONG and JIMMY ONG, petitioners,vs.COURT OF APPEALS
and SOLEDAD PARIAN, respondents.FACTS:On July 23, 1947, Ong Joi Jong
sold a parcel of land located at Fundidor Street, San Nicolas toprivate
respondent Soledad Parian, the wife of Ong Yee. The latter, the brother
of petitioner Ong Ching Po,died in January 1983; while petitioner Ong Ching
Po died in October 1986. The said sale was evidenced bya notarized Deed of
Sale written in English. Subsequently, the document was registered with the
Registerof Deeds of Manila, in the name of private respondent.According to
Parian, she entrusted the administration of the lot and building to petitioner
Ong ChingPo when she and her husband settled in Iloilo. When her husband
died, she demanded that the lot bevacated because she was going to sell it.
Unfortunately, petitioners refused to vacate the said premises.Parian filed a
case for unlawful detainer against petitioner Ong Ching Po before the
Metropolitan Trial Court of Manila, Branch 26. The inferior court dismissed
her case. The dismissal was affirmed by theRegional Trial Court, Branch 10,
Manila. The decision of the Regional Trial Court was, in turn, affirmed bythe
Court of Appeals, which dismissed the petition. The decision of the Court of
Appeals became final andexecutory.Petitioners, on the other hand, claimed
that on July 23, 1946, petitioner Ong Ching Po bought thesaid parcel of land
from Ong Joi Jong. The sale was evidenced by a photo copy of a Deed of
Sale written inChinese with the letter head "Sincere Trading Co."(Exhibit B).
With English translation:Deed of SaleI, Ong Joi Jong, a party to this Deed of
Sale hereby sell in absolutely (sic) manner a lot located onNo. 4 Fundidor
Street, San Nicolas an (sic) area consisting 213 square meters including a

one-storyhouse erected thereon unto Mr. Ong Ching Po for the sum of
P6,000.00 the receipt of which
ishereby acknowledged by me and consequently I have executed and signed
the governmentregistered title (sic) the said lot inclusive of the house
erected thereon, now belong (sic) to Mr. OngChing Po unequivocally. And
the purpose of this document is to precisely serve as proof of the
sale.Addendum: I have acceded to the request of Mr. Ong Ching Po into
signing another document infavor of Soledad Parian (She is the Filipino wife
of Ong Yee, brother of Ong Ching Po) for thepurpose of facilitating the
issuance of the new title by the City Register of Deeds and for the
reasonthat he is not yet a Filipino. I certify to the truthfulness of this
fact.Lot Seller: Ong Joi JongOn December 6, 1983, petitioner Ong Ching Po
executed a Deed of Absolute Sale conveying to hischildren, petitioners
Jimmy and David Ong, the same property sold by Ong Joi Jong to private
respondent in1947. On December 12 1985, petitioners Ong Ching Po, Jimmy
Ong and David Ong filed an action forreconveyance and damages against
private respondent in the Regional Trial Court,Manila.Parian filed an action
for quieting of title against petitioners Ong Ching Po and his wife,
petitioner Yu Siok Lian, in the Regional Trial Court,Manila. On May 30 1990,
the trial court rendered a decision infavor of private respondent. On appeal
by petitioners to the Court of Appeals, the said court affirmed thedecision of
the Regional Trial Court.Hence, this petition.ISSUE: WON Ong Ching Po is
the rightful owner of the said parcel of land?HELD:
NO. Aliens, whether individuals or corporations, have been disqualified from
acquiringpublic lands; hence, they have also been disqualified
from acquiring private lands.
As stated by petitioners themselves, what is in dispute ". . . is not so much
as to which betweenExhibit "A"(Deed of Conveyance to Parian) and "Exhibit
"B" is more weighty, but whether this document iswhat it purports to
be (i.e., a deed of conveyance in favor of Soledad Parian [private
respondent] or it wasonly resorted to or executed as a subterfuge because
the real buyer (Ong Ching Po) was an
alien
and itwas agreed upon between Ong Ching Po and his brother (Ong Yee,
Soledad Parian's husband) that the
landbe registered in the name of Soledad Parian in order to avoid legal comp
lications and to facilitate

registration and transfer and that the said title would be transferred by
Soledad to Ong Ching Po or hissuccessors-in-interest and that she would
be holding the title in trust for him"We cannot go along with the claim that
petitioner Ong Ching Po merely used private respondent asa dummy to have
the title over the parcel of land registered in her name because being an
alien he wasdisqualified to own real property in the Philippines. To sustain
such an outrageous contention would begiving a high premium to a violation
of our nationalization laws.Assuming that Exhibit "B" is in existence and that
it was duly executed
, still petitioners cannotclaim ownership of the disputed lot by virtue thereof.
Section 5, Article XIII of the 1935 Constitution provides, as
follows:Save in cases of hereditary succession, no private agricultural land s
hall be transferred orassigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain in the
Philippines.Section 14, Article XIV of the 1973 Constitution provides, as
follows:Save in cases of hereditary succession, no private land shall be
transferred or conveyed except toindividuals, corporations, or associations
qualified to acquire or hold lands in the public domain.Section 7, Article XII
of the 1987 Constitution provides:Save in cases of hereditary succession, no
private lands shall be transferred or conveyed except toindividuals,
corporations, or associations qualified to acquire or hold lands in the public
domain.
The capacity to acquire private land is made dependent upon the capacity to
acquire orhold lands of the public domain.
Private land may be transferred or conveyed only to individuals orentities
"qualified to acquire lands of the public
domain" The 1935 Constitution reserved the right to participate in the "dispo
sition, exploitation,development and utilization" of all "lands of the public do
main and other natural resources of thePhilippines" for Filipino citizens or
corporations at least sixty percent of the capital of which was owned
byFilipinos
. Aliens, whether individuals or corporations, have been disqualified from
acquiringpublic lands; hence, they have also been disqualified
from acquiring private
lands.Petitioner Ong Ching Po was a Chinese citizen; therefore, he was disqu
alified fromacquiring and owning real property. Assuming that
the genuineness and due execution of Exhibit "B" has been established, the
same is null and void, it being contrary to law.
(NOTE: Kaya (ata) may source ng 1935 at 1973 Consti dito kasi yung kaso
e nagsimula pa nung 1940s

Possession is acquired by Parian when notarized deed of conveyance was

issued.
It is not correct to say that private respondent never took possession of
the property. Under thelaw, possession is transferred to the vendee by
virtue of the notarized deed of conveyance. Under Article1498 of the Civil
Code of the Philippines, "when the sale is made through a public
instrument, theexecution thereof shall be equivalent to the delivery of the
object of the contract, if from the deed thecontrary does
not appear or cannot clearly be inferred." If what petitioners meant was that
privaterespondent never lived in the building constructed on said land, it
was because her family had settled inIloilo. There is no document showing
the establishment of an express trust by petitioner Ong Ching Po astrustor
and private respondent as trustee. Not even Exhibit "B" can be considered
as such a documentbecause private respondent, the registered owner of the
property subject of said "deed of sale," was not aparty thereto. The oral
testimony to prove the existence of the express trust will not suffice. Under
Article1443 of the Civil Code of the Philippines, "No express trust concerning
an immovable or any interesttherein may be proved by parole
evidence."Undaunted, petitioners argue that if they cannot prove an express
trust in writing, they can provean implied trust orally. While an implied trust
may be proved orally (Civil Code of the Philippines, Art.1457), the evidence
must be trustworthy and received by the courts with extreme caution,
because suchkind of evidence may be easily fabricated.
It is markworthy that all the tax receipts were in the name of private
respondent andher husband. The rental receipts were also in the name of
her husband.
Villa Rey Transit vs. Ferrer Case Digest
Villa Rey Transit vs. Ferrer
[GR L-23893, 29 October 1968]

Facts: [preceding case] Prior to 1959, Jose M. Villarama was an operator of

a bus transportation, under the business name of Villa Rey Transit, pursuant
to certificates of public convenience granted him by the Public Service
Commission (PSC) in Cases 44213 and 104651, which authorized him to
operate a total of 32 units on various routes or lines from Pangasinan to
Manila, and vice-versa. On 8 January 1959, he sold the two certificates of
public convenience to the Pangasinan Transportation Company, Inc.
(Pantranco), 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
sale, apply for any TPU service identical or competing with the buyer."

Barely 3 months thereafter, or on 6 March 1959: a corporation called Villa

Rey Transit, Inc. (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 (10 March 1959), the Corporation, on
7 April 1959, bought 5 certificates of public convenience, 49 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 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. On 19 May 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 7 July
1959, levied on 2 of the five certificates of public convenience involved
therein, namely, those issued under PSC cases 59494 and 63780, pursuant
to a writ of execution issued by the Court of First Instance of Pangasinan in
Civil Case 13798, in favor of Eusebio E. Ferrer against Valentin Fernando.
The Sheriff made and entered the levy in the records of the PSC. On 16 July
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. 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 124057, and that of Ferrer and Pantranco, Case
126278, were scheduled for a joint hearing. In the meantime, to wit, on 22
July 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
two certificates 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, 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.

[present case] On 4 November 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 59494
and 63780) in favor of Ferrer, and the subsequent sale thereof by the latter
to Pantranco, against Ferrer, Pantranco and the PSC. The Corporation
prayed therein that all the orders of the PSC relative to the parties' dispute
over the said certificates be annulled. The CFI of Manila declared the
sheriff's sale of two certificates of public convenience in favor of Ferrer and
the subsequent sale thereof by the latter to Pantranco null and void;
declared the Corporation to be the lawful owner of the said certificates of
public convenience; and ordered Ferrer and Pantranco, jointly and severally,
to pay the Corporation, the sum of P5,000.00 as and for attorney's fees. The
case against the PSC was dismissed. All parties appealed.

Issue: Whether the stipulation, "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" in the contract between Villarama and
Pantranco, binds the Corporation (the Villa Rey Transit, Inc.).

Held: Villarama supplied the organization expenses and the assets of the
Corporation, such as trucks and equipment; 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; Villarama made use of the money of the
Corporation and deposited them to his private accounts; and the
Corporation paid his personal accounts. Villarama himself admitted that he
mingled the corporate funds with his own money. These 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. 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.
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, 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. Hence, 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.
Where the Corporation is substantially the alter ego of the covenantor to the
restrictive agreement, it can be enjoined from competing with the
covenantee.
Compania Maritima vs. Allied Free Workers Union, et al.

Facts:
1952, Compania Maritima (CM) and Allied (union) entered into a
contract whereby the union agrees to perform arrastre (handling of
cargo on the wharf) and stevedoring (handling of cargoes in the
holds of vessels) work for the consignees of the cargoes of vessels,
for a period of 1 month; CM has a right to revoke the contract if
union failed to render proper service.
Shippers and consigners paid the union for arrastre work, but
refused to pay the stevedoring. CM refused to pay the stevedoring
work also, because contract provides that it will be paid by the
shippers and consignees. Union requested CM to recognize it as
SEBA but CM refused; CM thru Teves (branch manager) terminated
the contract; union filed charges of ULP.
CM entered the same contract with another association; union
picketed the wharf and prevented the new workers from performing
their work; CM sued the union and its officers for the rescission of
contract and to enjoin union from interfering with the
loading/unloading of cargo and recovery of damages. Lower court
ruled in CMs favor and awarded CM 450K as damages; it held that
the officers of the union are solidarily liable for this amount. Union
appealed.
CM in its original complaint prayed that union and its officials be
ordered to pay 450K actual damages, consisting of: 15K for failure
to load/unload cargo; 50K for unions inefficiency in performing the
work; 50K moral and exemplary damages; 178K+ and 62K+ for lost
profit (due to unions obstruction). CM hired 2 auditors to ascertain
the losses. Reports of the 2 accountants show that the aggregate
amount of damage is 349K+.
Issue: WON the evidence presented by CM warrants the award of damages
in its favor

Held: NO

On the basis of the reports of the two accountants, the damages,

claimed by the complaint as a matter of simple addition, does not

reach the sum of P 450,000 fixed by the trial court. The damages,
shown in the accountants' reports and in the statement made by the
consignees, chief clerk (who did not testify) amount to P349,245.37
CM argues that the accountants' reports are admissible in evidence
because of the rule that "when the original consists of numerous
accounts or other documents which cannot be examined in court
without great loss-of time and the fact sought to be established
from them is the general result of the whole", the original writings
need not be produced. SC held that:
o That rule cannot be applied in this case because the
voluminous character of the records, on which the
accountants' reports were based, was not duly
established.
o

It is also a requisite for the application of the rule that the

records and accounts should be made accessible to the
adverse party so that the company may be tested on
cross-examination.
What applies to this case is the general rule "that an audit
made by, or the testimony of, a private auditor, is
inadmissible in evidence as proof of the original records,
books of accounts, reports or the like"

That general rule cannot be relaxed in this case because the

company failed to make a preliminary showing as to
the difficulty or impossibility attending the production
of the records in court and their examination and analysis as
evidence by the court
A close scrutiny of the accountants' reports reveals their lack of
probative value.
o

One of the accountant, Jayme, did not disclose the names of

other "auditors" who assisted him in making the
examination of the consignees records.

He gave the impression that he was an independent

accountant hired by the company to make a "special
investigation" when in truth he was a "personal friend" of
Teves.

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.

It would not be proper to allow Jayme's estimates as

recoverable damages. They are not supported by reliable
evidence. The rule is that the auditor's summary should not
include his conclusions or inferences. His opinion is not
evidence.

Jayme allegedly based his computations on the records of

the company which were not produced in court.

As to the other auditor Magante, he did not testify on his

statement. Instead, accountant Jayme, substituting for
Magante, testified on that statement. Jayme said that he
verified the consignees records on which Magante based his
statement.

Statement by branch manager Teves that union is liable

for 38K+ as depreciation of forklifts, etc. used by union
>>SC: The best evidence on the cost of the said equipment
would have been the sales invoices instead of the oral
testimony of Teves. He did not produce the sales invoices.

Records voluminous? NO, If the accountant Magante was able to

summarize the contents of those records in two days, they could not
have been very voluminous. They should have been offered in
evidence.