RULE 130 OBJECT EVIDENCE
G.R. Nos. 108280-83 November 16, 1995
ROMEO SISON, NILO PACADAR, JOEL TAN, RICHARD DE LOS
SANTOS, and JOSELITO TAMAYO, petitioners,
vs.
PEOPLE OF THE PHILIPPINES and COURT OF
APPEALS, respondents.
G.R. Nos. 114931-33 November 16, 1995
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ANNIE FERRER, accused, ROMEO SISON, NILO PACADAR, JOEL
TAN, RICHARD DE LOS SANTOS, and JOSELITO TAMAYO, accused-
appellants.
PUNO, J.:
The case before us occurred at a time of great political polarization in the
aftermath of the 1986 EDSA Revolution. This was the time when the
newly-installed government of President Corazon C. Aquino was being
openly challenged in rallies, demonstrations and other public fora by
"Marcos loyalists," supporters of deposed President Ferdinand E.
Marcos. Tension and animosity between the two (2) groups sometimes
broke into violence. On July 27, 1986, it resulted in the murder of
Stephen Salcedo, a known "Coryista."
From August to October 1986, several informations were filed in court
against eleven persons identified as Marcos loyalists charging them with
the murder of Salcedo. Criminal Case No. 86-47322 was filed against
Raul Billosos y de Leon and Gerry Nery y Babazon; Criminal Case No.
86-47617 against Romeo Sison y Mejia, Nilo Pacadar y Abe and Joel
Tan y Mostero; Criminal Case No. 86-47790 against Richard de los
Santos y Arambulo; Criminal Case No. 86-48538 against Joselito
Tamayo y Ortia; and Criminal Case No. 86-48931 against Rolando
Fernandez y Mandapat. Also filed were Criminal Cases Nos. 86-49007
PINEDAPCGRNMAN
and 86-49008 against Oliver Lozano and Benjamin Nuega as well as
Annie Ferrer charging them as accomplices to the murder of Salcedo.
The cases were consolidated and raffled to the Regional Trial Court,
Branch XLIX, Manila. All of the accused pleaded not guilty to the charge
and trial ensued accordingly. The prosecution presented twelve
witnesses, including two eyewitnesses, Ranulfo Sumilang and Renato
Banculo, and the police officers who were at the Luneta at the time of the
incident. In support of their testimonies, the prosecution likewise
presented documentary evidence consisting of newspaper accounts of
the incident and various photographs taken during the mauling.
The prosecution established that on July 27, 1986, a rally was scheduled
to be held at the Luneta by the Marcos loyalists. Earlier, they applied for
a permit to hold the rally but their application was denied by the
authorities. Despite this setback, three thousand of them gathered at the
Rizal Monument of the Luneta at 2:30 in the afternoon of the scheduled
day. Led by Oliver Lozano and Benjamin Nuega, both members of the
Integrated Bar of the Philippines, the loyalists started an impromptu
singing contest, recited prayers and delivered speeches in between.
Colonel Edgar Dula Torres, then Deputy Superintendent of the Western
Police District, arrived and asked the leaders for their permit. No permit
could be produced. Colonel Dula Torres thereupon gave them ten
minutes to disperse. The loyalist leaders asked for thirty minutes but this
was refused. Atty. Lozano turned towards his group and said "Gulpihin
ninyo ang lahat ng mga Cory infiltrators." Atty. Nuega added "Sige, sige
gulpihin ninyo!" The police then pushed the crowd, and used tear gas and
truncheons to disperse them. The loyalists scampered away but some of
them fought back and threw stones at the police. Eventually, the crowd
fled towards Maria Orosa Street and the situation later stabilized. 1
At about 4:00 p.m., a small group of loyalists converged at the Chinese
Garden, Phase III of the Luneta. There, they saw Annie Ferrer, a popular
movie starlet and supporter of President Marcos, jogging around the
fountain. They approached her and informed her of their dispersal and
Annie Ferrer angrily ordered them "Gulpihin ninyo and mga Cory
hecklers!" Then she continued jogging around the fountain chanting
"Marcos pa rin, Marcos pa rin, Pabalikin si Marcos, Pabalikin si Marcos,
Page 1
Bugbugin ang mga nakadilaw!" The loyalists replied "Bugbugin!" A few
minutes later, Annie Ferrer was arrested by the police. Somebody then
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RULE 130 OBJECT EVIDENCE
shouted "Kailangang gumanti, tayo ngayon!" A commotion ensued and
Renato Banculo, a cigarette vendor, saw the loyalists attacking persons
in yellow, the color of the "Coryistas." Renato took off his yellow shirt. 2 He
then saw a man wearing a yellow t-shirt being chased by a group of persons
shouting "Iyan, habulin iyan. Cory iyan!" The man in the yellow t-shirt was
Salcedo and his pursuers appeared to be Marcos loyalists. They caught
Salcedo and boxed and kicked and mauled him. Salcedo tried to extricate
himself from the group but they again pounced on him and pummelled him
with fist blows and kicks hitting him on various parts of his body. Banculo saw
Ranulfo Sumilang, an electrician at the Luneta, rush to Salcedo's aid.
Sumilang tried to pacify the maulers so he could extricate Salcedo from
them. But the maulers pursued Salcedo unrelentingly, boxing him with stones
in their fists. Somebody gave Sumilang a loyalist tag which Sumilang showed
to Salcedo's attackers. They backed off for a while and Sumilang was able to
tow Salcedo away from them. But accused Raul Billosos emerged from
behind Sumilang as another man boxed Salcedo on the head. Accused
Richard de los Santos also boxed Salcedo twice on the head and kicked him
even as he was already fallen. 3 Salcedo tried to stand but accused Joel Tan
boxed him on the left side of his head and ear. 4 Accused Nilo Pacadar
punched Salcedo on his nape, shouting: "Iyan, Cory Iyan.
Patayin!" 5Sumilang tried to pacify Pacadar but the latter lunged at the victim
again. Accused Joselito Tamayo boxed Salcedo on the left jaw and kicked
him as he once more fell. Banculo saw accused Romeo Sison trip Salcedo
and kick him on the head, and when he tried to stand, Sison repeatedly
boxed him. 6 Sumilang saw accused Gerry Neri approach the victim but did
not notice what he did. 7
Salcedo somehow managed to get away from his attackers and wipe off
the blood from his face. He sat on some cement steps 8 and then tried to
flee towards Roxas boulevard to the sanctuary of the Rizal Monument but
accused Joel Tan and Nilo Pacadar pursued him, mauling Sumilang in the
process. Salcedo pleaded for his life exclaiming "Maawa na kayo sa akin.
Tulungan ninyo ako." He cried: "Pulis, pulis. Wala bang pulis?" 9
The mauling resumed at the Rizal Monument and continued along Roxas
Boulevard until Salcedo collapsed and lost consciousness. Sumilang
flagged down a van and with the help of a traffic officer, brought Salcedo
to the Medical Center Manila but he was refused admission. So they took
him to the Philippine General Hospital where he died upon arrival.
PINEDAPCGRNMAN
Salcedo died of "hemorrhage, intracranial traumatic." He sustained
various contusions, abrasions, lacerated wounds and skull fractures as
revealed in the following post-mortem findings:
Cyanosis, lips, and nailbeds.
Contused-abrasions: 6.0 x 2.5 cm., and 3.0 x 2.4 cm.,
frontal region, right side; 6.8 x 4.2 cm., frontal region, left
side; 5.0 x 4.0 cm., right cheek; 5.0 x 3.5 cm., face, left
side; 3.5 x 2.0 cm., nose; 4.0 x 2.1 cm., left ear, pinna; 5.0
x 4.0 cm. left suprascapular region; 6.0 x 2.8 cm., right
elbow.
Abrasions: 4.0 x 2.0 cm., left elbow; 2.0 x 1.5 cm., right
knee.
Lacerated wounds: 2.2 cm., over the left eyebrow; 1.0
cm., upper lip.
Hematoma, scalp; frontal region, both sides; left parietal
region; right temporal region; occipital region, right side.
Fractures, skull; occipital bone, right side; right posterior
cranial fossa; right anterior cranial fossa.
Hemorrhage, subdural, extensive.
Other visceral organs, congested.
Stomach, about 1/2 filled with grayish brown food
materials and fluid. 10
The mauling of Salcedo was witnessed by bystanders and several press
people, both local and foreign. The press took pictures and a video of the
event which became front-page news the following day, capturing
national and international attention. This prompted President Aquino to
order the Capital Regional Command and the Western Police District to
Page 2
investigate the incident. A reward of ten thousand pesos (P10,000.00)
was put up by Brigadier General Alfredo Lim, then Police Chief, for
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RULE 130 OBJECT EVIDENCE
persons who could give information leading to the arrest of the
killers.11 Several persons, including Ranulfo Sumilang and Renato Banculo,
cooperated with the police, and on the basis of their identification, several
persons, including the accused, were apprehended and investigated.
For their defense, the principal accused denied their participation in the
mauling of the victim and offered their respective alibis. Accused Joselito
Tamayo testified that he was not in any of the photographs presented by
the prosecution 12 because on July 27, 1986, he was in his house in Quezon
City. 13 Gerry Neri claimed that he was at the Luneta Theater at the time of
the
incident. 14 Romeo Sison, a commercial photographer, was allegedly at his
office near the Luneta waiting for some pictures to be developed at that
time. 15 He claimed to be afflicted with hernia impairing his mobility; he
cannot run normally nor do things forcefully. 16 Richard de los Santos admits
he was at the Luneta at the time of the mauling but denies hitting
Salcedo. 17 He said that he merely watched the mauling which explains why
his face appeared in some of the photographs. 18 Unlike the other accused,
Nilo Pacadar admits that he is a Marcos loyalist and a member of the Ako'y
Pilipino Movement and that he attended the rally on that fateful day.
According to him, he saw Salcedo being mauled and like Richard de los
Santos, merely viewed the incident. 19 His face was in the pictures because
he shouted to the maulers to stop hitting Salcedo. 20 Joel Tan also testified
that he tried to pacify the maulers because he pitied Salcedo. The maulers
however ignored him. 21
The other accused, specifically Attys. Lozano and Nuega and Annie
Ferrer opted not to testify in their defense.
On December 16, 1988, the trial court rendered a decision finding Romeo
Sison, Nilo Pacadar, Joel Tan, Richard de los Santos and Joselito
Tamayo guilty as principals in the crime of murder qualified by treachery
and sentenced them to 14 years 10 months and 20 days of reclusion
temporal as minimum to 20 years of reclusion temporal as maximum.
Annie Ferrer was likewise convicted as an accomplice. The court,
however, found that the prosecution failed to prove the guilt of the other
accused and thus acquitted Raul Billosos, Gerry Nery, Rolando
Fernandez, Oliver Lozano and Benjamin Nuega. The dispositive portion
of the decision reads as follows:
PINEDAPCGRNMAN
WHEREFORE, judgement is hereby rendered in the
aforementioned cases as follows:
1. In "People versus Raul Billosos and Gerry Nery,"
Criminal Case No. 86-47322, the Court finds that the
Prosecution failed to prove the guilt of the two (2)
Accused beyond reasonable doubt for the crime charged
and hereby acquits them of said charge;
2. In "People versus Romeo Sison, et al.," Criminal Case
No. 86-47617, the Court finds the Accused Romeo Sison,
Nilo Pacadar and Joel Tan, guilty beyond reasonable
doubt, as principals for the crime of Murder, defined in
Article 248 of the Revised Penal Code, and, there being
no other mitigating or aggravating circumstances, hereby
imposes on each of them an indeterminate penalty of
from FOURTEEN (14)YEARS, TEN (10) MONTHS and
TWENTY (20) DAYS, of Reclusion Temporal, as
minimum, to TWENTY (20) DAYS, of Reclusion
Temporal, as minimum, to TWENTY (20) YEARS
of Reclusion Temporal, as Maximum;
3. In "People versus Richard de los Santos," Criminal
Case No. 86-47790, the Court finds the Accused Richard
de los Santos guilty beyond reasonable doubt as principal
for the crime of Murder defined in Article 248 of the
Revised Penal Code and, there being no other
extenuating circumstances, the Court hereby imposes on
him an indeterminate penalty of from FOURTEEN (14)
YEARS, TEN (10) MONTHS and TWENTY (20) DAYS
of Reclusion Temporal, as Minimum, to TWENTY (20)
YEARS of Reclusion Temporal as Maximum;
4. In "People versus Joselito Tamayo," Criminal Case No.
86-48538 the Court finds the Accused guilty beyond
reasonable doubt as principal, for the crime of "Murder"
defined in Article 248 of the Revised Penal Code and
hereby imposes on him an indeterminate penalty of from
Page 3
FOURTEEN (14) YEARS, TEN (10) MONTHS and
TWENTY (20) DAYS of Reclusion Temporal, as
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RULE 130 OBJECT EVIDENCE
Minimum, to TWENTY (20) YEARS of Reclusion
Temporal, as Maximum;
5. In "People versus Rolando Fernandez," Criminal Case
No. 86-4893l, the Court finds that the Prosecution failed
to prove the guilt of the Accused for the crime charged
beyond reasonable doubt and hereby acquits him of said
charge;
6. In "People versus Oliver Lozano, et al.," Criminal Case
No. 86-49007, the Court finds that the Prosecution failed
to prove the guilt of the Accused beyond reasonable
doubt for the crime charged and hereby acquits them of
said charge;
7. In "People versus Annie Ferrer," Criminal Case No. 86-
49008, the Court finds the said Accused guilty beyond
reasonable doubt, as accomplice to the crime of Murder
under Article 18 in relation to Article 248 of the Revised
Penal Code and hereby imposes on her an indeterminate
penalty of NINE (9) YEARS and FOUR (4) MONTHS
of Prision Mayor, as Minimum to TWELVE (12) YEARS,
FIVE (5) MONTHS and ELEVEN (11) DAYS of Reclusion
Temporal, as Maximum.
The Accused Romeo Sison, Nilo Pacadar, Richard de los
Santos, Joel Tan, Joselito Tamayo and Annie Ferrer are
hereby ordered to pay, jointly and severally, to the heirs of
Stephen Salcedo the total amount of P74,000.00 as
actual damages and the amount of P30,000.00 as moral
and exemplary damages, and one-half (1/2) of the costs
of suit.
The period during which the Accused Nilo Pacadar,
Romeo Sison, Joel Tan, Richard de los Santos and
Joselito Tamayo had been under detention during the
pendency of these cases shall be credited to them
provided that they agreed in writing to abide by and
comply strictly with the rules and regulations of the City
Jail.
PINEDAPCGRNMAN
The Warden of the City Jail of Manila is hereby ordered to
release the Accused Gerry Nery, Raul Billosos and
Rolando Fernandez from the City Jail unless they are
being detained for another cause or charge.
The Petition for Bail of the Accused Rolando Fernandez
has become moot and academic. The Petition for Bail of
the Accused Joel Tan, Romeo Sison and Joselito Tamayo
is denied for lack of merit.
The bail bonds posted by the Accused Oliver Lozano and
Benjamin Nuega are hereby cancelled. 22
On appeal, the Court of Appeals 23 on December 28, 1992, modified the
decision of the trial court by acquitting Annie Ferrer but increasing the
penalty of the rest of the accused, except for Joselito Tamayo, to reclusion
perpetua. The appellate court found them guilty of murder qualified by abuse
of superior strength, but convicted Joselito Tamayo of homicide because the
information against him did not allege the said qualifying circumstance. The
dispositive portion of the decision reads:
PREMISES CONSIDERED, the decision appealed from is
hereby MODIFIED as follows:
1. Accused-appellants Romeo Sison y Mejia, Nilo
Pacadar y Abe, Joel Tan y Mostero and Richard de los
Santos are hereby found GUILTY beyond reasonable
doubt of Murder and are each hereby sentenced to suffer
the penalty of Reclusion Perpetua;
2. Accused-appellant Joselito Tamayo y Oria is hereby
found GUILTY beyond reasonable doubt of the crime of
Homicide with the generic aggravating circumstance of
abuse of superior strength and, as a consequence, an
indeterminate penalty of TWELVE (12) YEARS of prision
mayor as Minimum to TWENTY (20) YEARS of reclusion
temporal as Maximum is hereby imposed upon him;
Page 4
3. Accused-appellant Annie Ferrer is hereby ACQUITTED
of being an accomplice to the crime of Murder.
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RULE 130 OBJECT EVIDENCE
CONSIDERING that the penalty of Reclusion
Perpetua has been imposed in the instant consolidated
cases, the said cases are now hereby certified to the
Honorable Supreme Court for review. 24
Petitioners filed G.R. Nos. 108280-83 under Rule 45 of the Revised
Rules of Court inasmuch as Joselito Tamayo was not sentenced
to reclusion perpetua. G.R. Nos. 114931-33 was certified to us for
automatic review of the decision of the Court of Appeals against the four
accused-appellants sentenced to reclusion perpetua.
Before this court, accused-appellants assign the following errors:
I MURDER AND NOT DEATH (HOMICIDE) CAUSED IN A
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED WHEN IT NOTED THAT THE ACCUSED
FAILED TO CITE ANYTHING ON RECORD TO
SUPPORT THEIR AVERMENT THAT THERE WERE NO
WITNESSES WHO HAVE COME FORWARD TO
IDENTIFY THE PERSONS RESPONSIBLE FOR THE
DEATH OF STEPHEN SALCEDO.
II
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN GIVING CREDENCE TO THE UNRELIABLE,
DOUBTFUL, SUSPICIOUS AND INCONCLUSIVE
TESTIMONIES OF PROSECUTION WITNESS
RANULFO SUMILANG.
III
THE HONORABLE COURT OF APPEALS LIKEWISE
ERRED IN FINDING THE ACCUSED GUILTY WHEN
THERE WAS NO EVIDENCE TO PROVE THAT ANY OF
THE ACCUSED CARRIED A HARD AND BLUNT
INSTRUMENT, THE ADMITTED CAUSE OF THE
PINEDAPCGRNMAN
HEMORRHAGE RESULTING IN THE DEATH OF THE
DECEASED.
IV
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT THERE EXISTS
CONSPIRACY AMONG THE PRINCIPAL ACCUSED.
V
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT THE CRIME COMMITTED IS
TUMULTUOUS AFFRAY. 25
In their additional brief, appellants contend that:
I
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN REACHING A CONCLUSION OF FACT
UTILIZING SPECULATIONS, SURMISES, NON-
SEQUITUR CONCLUSIONS, AND EVEN THE
DISPUTED DECISION OF THE TRIAL COURT, TO
UPHOLD THE VALIDITY OF THE VERY SAME
JUDGMENT, ALL CONTRARY TO THE RULES OF
EVIDENCE.
II
THE HONORABLE COURT OF APPEALS ERRED IN
ADMITTING EXHIBITS "D", "G", "O", "P", "V", TO "V-48",
"W" TO "W-13", ALL OF WHICH WERE NOT
PROPERLY IDENTIFIED.
III
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RULE 130 OBJECT EVIDENCE
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN CONCLUDING THAT CONSPIRACY
EXISTED IN THE CASE AT BAR DISREGARDING
ALTOGETHER THE SETTLED JURISPRUDENCE ON
THE MATTER.
IV
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN RULING THAT THE CRIME COMMITTED
WAS MURDER, NOT DEATH (HOMICIDE) IN
TUMULTUOUS AFFRAY SIDESTEPPING IN THE
PROCESS THE FACTUAL GROUNDS SURROUNDING
THE INCIDENT. 26
Appellants mainly claim that the Court of Appeals erred in
sustaining the testimonies of the two in prosecution
eyewitnesses, Ranulfo Sumilang and Renato Banculo, because
they are unreliable, doubtful and do not deserve any credence.
According to them, the testimonies of these two witnesses are
suspect because they surfaced only after a reward was
announced by General Lim. Renato Banculo even submitted
three sworn statements to the police geared at providing a new or
improved version of the incident. On the witness stand, he
mistakenly identified a detention prisoner in another case as
accused Rolando Fernandez. 27 Ranulfo Sumilang was evasive and
unresponsive prompting the trial court to reprimand him several
times. 28
There is no proof that Banculo or Sumilang testified because of the
reward announced by General Lim, much less that both or either of them
ever received such reward from the government. On the contrary, the
evidence shows that Sumilang reported the incident to the police and
submitted his sworn statement immediately two hours after the mauling,
even before announcement of any reward. 29 He informed the police that
he would cooperate with them and identify Salcedo's assailants if he saw
them again. 30
The fact that Banculo executed three sworn statements does not make
them and his testimony incredible. The sworn statements were made to
PINEDAPCGRNMAN
identify more suspects who were apprehended during the investigation of
Salcedo's death. 31
The records show that Sumilang was admonished several times by the
trial court on the witness stand for being argumentative and
evasive. 32 This is not enough reason to reject Sumilang's testimony for he
did not exhibit this undesirable conduct all throughout his testimony. On the
whole, his testimony was correctly given credence by the trial court despite
his evasiveness at some instances. Except for compelling reasons, we
cannot disturb the way trial courts calibrate the credence of witnesses
considering their visual view of the demeanor of witnesses when on the
witness stand. As trial courts, they can best appreciate the verbal and non-
verbal dimensions of a witness' testimony.
Banculo's mistake in identifying another person as one of the accused
does not make him an entirely untrustworthy witness. 33 It does not make
his whole testimony a falsity. An honest mistake is not inconsistent with a
truthful testimony. Perfect testimonies cannot be expected from persons with
imperfect senses. In the court's discretion, therefore, the testimony of a
witness can be believed as to some facts but disbelieved with respect to the
others. 34
We sustain the appellate and trial courts' findings that the witnesses'
testimonies corroborate each other on all important and relevant details
of the principal occurrence. Their positive identification of all petitioners
jibe with each other and their narration of the events are supported by the
medical and documentary evidence on record.
Dr. Roberto Garcia, the medico-legal officer of the National Bureau of
Investigation, testified that the victim had various wounds on his body
which could have been inflicted by pressure from more than one hard
object. 35 The contusions and abrasions found could have been caused by
punches, kicks and blows from rough stones. 36 The fatal injury of intracranial
hemorrhage was a result of fractures in Salcedo's skull which may have been
caused by contact with a hard and blunt object such as fistblows, kicks and a
blunt wooden instrument. 37
Appellants do not deny that Salcedo was mauled, kicked and punched.
Sumilang in fact testified that Salcedo was pummeled by his assailants
Page 6
with stones in their hands. 38
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RULE 130 OBJECT EVIDENCE
Appellants also contend that although the appellate court correctly
disregarded Exhibits "D," "G," and "P," it erroneously gave evidentiary
weight to Exhibits "O," "V," "V-1" to "V-48," "W," "W-1" to "W-
13." 39 Exhibit "O" is the Joint Affidavit of Pat. Flores and Pat. Bautista, the
police intelligence-operatives who witnessed the rally and subsequent
dispersal operation. Pat. Flores properly identified Exhibit "O" as his sworn
statement and in fact gave testimony corroborating the contents
thereof. 40 Besides, the Joint Affidavit merely reiterates what the other
prosecution witnesses testified to. Identification by Pat. Bautista is a
surplusage. If appellants wanted to impeach the said affidavit, they should
have placed Pat. Flores on the witness stand.
Exhibits "V," "V-1" to "V-48" are photographs taken of the victim as he
was being mauled at the Luneta — starting from a grassy portion to the
pavement at the Rizal Monument and along Roxas Boulevard, 41 — as he
was being chased by his assailants 42 and as he sat pleading with his
assailants. 43 Exhibits "W", "W-1" to "W-13" are photographs of Salcedo and
the mauling published in local newspapers and magazines such as the
Philippine Star, 44 Mr. and Ms. Magazine, 45 Philippine Daily Inquirer, 46 and
the Malaya. 47 The admissibility of these photographs is being questioned by
appellants for lack of proper identification by the person or persons who took
the same.
The rule in this jurisdiction is that photographs, when presented in
evidence, must be identified by the photographer as to its production and
testified as to the circumstances under which they were produced. 48 The
value of this kind of evidence lies in its being a correct representation or
reproduction of the original, 49 and its admissibility is determined by its
accuracy in portraying the scene at the time of the crime. 50 The
photographer, however, is not the only witness who can identify the pictures
he has taken. 51 The correctness of the photograph as a faithful
representation of the object portrayed can be proved prima facie, either by
the testimony of the person who made it or by other competent witnesses,
after which the court can admit it subject to impeachment as to its
accuracy. 52 Photographs, therefore, can be identified by the photographer or
by any other competent witness who can testify to its exactness and
accuracy. 53
This court notes that when the prosecution offered the photographs as
part of its evidence, appellants, through counsel Atty. Alfredo Lazaro, Jr.
objected to their admissibility for lack of proper identification. 54 However,
PINEDAPCGRNMAN
when the accused presented their evidence, Atty. Winlove Dumayas, counsel
for accused Joselito Tamayo and Gerry Neri used Exhibits "V", "V-1" to "V-
48" to prove that his clients were not in any of the pictures and therefore
could not have participated in the mauling of the victim. 55 The photographs
were adopted by appellant Joselito Tamayo and accused Gerry Neri as part
of the defense exhibits. And at this hearing, Atty. Dumayas represented all
the other accused per understanding with their respective counsels, including
Atty. Lazaro, who were absent. At subsequent hearings, the prosecution
used the photographs to cross-examine all the accused who took the witness
stand. 56 No objection was made by counsel for any of the accused, not until
Atty. Lazaro appeared at the third hearing and interposed a continuing
objection to their admissibility. 57
The objection of Atty. Lazaro to the admissibility of the photographs is
anchored on the fact that the person who took the same was not
presented to identify them. We rule that the use of these photographs by
some of the accused to show their alleged non-participation in the crime
is an admission of the exactness and accuracy thereof. That the
photographs are faithful representations of the mauling incident was
affirmed when appellants Richard de los Santos, Nilo Pacadar and Joel
Tan identified themselves therein and gave reasons for their presence
thereat. 58
An analysis of the photographs vis-a-vis the accused's testimonies reveal
that only three of the appellants, namely, Richard de los Santos, Nilo
Pacadar and Joel Tan could be readily seen in various belligerent poses
lunging or hovering behind or over the victim. 59 Appellant Romeo Sison
appears only once and he, although afflicted with hernia is shown merely
running after the
victim. 60Appellant Joselito Tamayo was not identified in any of the pictures.
The absence of the two appellants in the photographs does not exculpate
them. The photographs did not capture the entire sequence of the killing of
Salcedo but only segments thereof. While the pictures did not record Sison
and Tamayo hitting Salcedo, they were unequivocally identified by Sumilang
and
Banculo 61Appellants' denials and alibis cannot overcome their eyeball
identification.
Appellants claim that the lower courts erred in finding the existence of
conspiracy among the principal accused and in convicting them of
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RULE 130 OBJECT EVIDENCE
murder qualified by abuse of superior strength, not death in tumultuous
affray.
Death in a tumultuous affray is defined in Article 251 of the Revised
Penal code as follows:
Art. 251. Death caused in a tumultuous affray. — When,
while several persons, not composing groups organized
for the common purpose of assaulting and attacking each
other reciprocally, quarrel and assault each other in a
confused and tumultuous manner, and in the course of
the affray someone is killed, and it cannot be ascertained
who actually killed the deceased, but the person or
persons who inflicted serious physical injuries can be
identified, such person or persons shall be punished
by prison mayor.
If it cannot be determined who inflicted the serious
physical injuries on the deceased, the penalty of prision
correccional in its medium and maximum periods shall be
imposed upon all those who shall have used violence
upon the person of the victim.
For this article to apply, it must be established that: (1) there be
several persons; (2) that they did not compose groups organized
for the common purpose of assaulting and attacking each other
reciprocally; (3) these several persons quarrelled and assaulted
one another in a confused and tumultuous manner; (4) someone
was killed in the course of the affray; (5) it cannot be ascertained
who actually killed the deceased; and (6) that the person or
persons who inflicted serious physical injuries or who used
violence can be identified. 62
A tumultuous affray takes place when a quarrel occurs between several
persons and they engage in a confused and tumultuous affray, in the
course of which some person is killed or wounded and the author thereof
cannot be ascertained. 63
PINEDAPCGRNMAN
The quarrel in the instant case, if it can be called a quarrel, was between
one distinct group and one individual. Confusion may have occurred
because of the police dispersal of the rallyists, but this confusion
subsided eventually after the loyalists fled to Maria Orosa Street. It was
only a while later after said dispersal that one distinct group identified as
loyalists picked on one defenseless individual and attacked him
repeatedly, taking turns in inflicting punches, kicks and blows on him.
There was no confusion and tumultuous quarrel or affray, nor was there a
reciprocal aggression at this stage of the incident. 64
As the lower courts found, the victim's assailants were numerous by as
much as fifty in number 65 and were armed with stones with which they hit
the victim. They took advantage of their superior strength and excessive
force and frustrated any attempt by Salcedo to escape and free himself. They
followed Salcedo from the Chinese Garden to the Rizal Monument several
meters away and hit him mercilessly even when he was already fallen on the
ground. There was a time when Salcedo was able to get up, prop himself
against the pavement and wipe off the blood from his face. But his attackers
continued to pursue him relentlessly. Salcedo could not defend himself nor
could he find means to defend himself. Sumilang tried to save him from his
assailants but they continued beating him, hitting Sumilang in the process.
Salcedo pleaded for mercy but they ignored his pleas until he finally lost
consciousness. The deliberate and prolonged use of superior strength on a
defenseless victim qualifies the killing to murder.
Treachery as a qualifying circumstance cannot be appreciated in the
instant case. There is no proof that the attack on Salcedo was
deliberately and consciously chosen to ensure the assailants' safety from
any defense the victim could have made. True, the attack on Salcedo
was sudden and unexpected but it was apparently because of the fact
that he was wearing a yellow t-shirt or because he allegedly flashed the
"Laban" sign against the rallyists, taunting them into mauling him. As the
appellate court well found, Salcedo had the opportunity to sense the
temper of the rallyists and run away from them but he, unfortunately, was
overtaken by them. The essence of treachery is the sudden and
unexpected attack without the slightest provocation on the part of the
person being attacked. 66
The qualifying circumstance of evident premeditation was alleged in the
Page 8
information against Joselito Tamayo. Evident premeditation cannot be
appreciated in this case because the attack against Salcedo was sudden
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
and spontaneous, spurred by the raging animosity against the so-called 3. All accused-appellants are hereby ordered to pay
"Coryistas." It was not preceded by cool thought and reflection. jointly and severally the heirs of Stephen Salcedo the
following amounts:
We find however the existence of a conspiracy among appellants. At the
time they were committing the crime, their actions impliedly showed a (a) P74,000.00 as actual damages;
unity of purpose among them, a concerted effort to bring about the death
of Salcedo. Where a conspiracy existed and is proved, a showing as to (b) P100,000.00 as moral damages; and
who among the conspirators inflicted the fatal wound is not required to
sustain a conviction. 67 Each of the conspirators is liable for all acts of the (c) P50,000.00 as indemnity for the death
others regardless of the intent and character of their participation, because of the victim.
the act of one is the act of all. 68
Costs against accused-appellants.
The trial court awarded the heirs of Salcedo P74,000.00 as actual
damages, P30,000.00 as moral and exemplary damages, and one half of
the costs of the suit. At the time he died on July 27, 1986, Salcedo was SO ORDERED.
twenty three years old and was set to leave on August 4, 1986 for
employment in Saudi Arabia. 69 The reckless disregard for such a young
person's life and the anguish wrought on his widow and three small
children, 70 warrant an increase in moral damages from P30,000.00 to
P100,000.00. The indemnity of P50,000.00 must also be awarded for the
death of the victim.71

IN VIEW WHEREOF, the decision appealed from is hereby affirmed and

modified as follows:

1. Accused-appellants Romeo Sison, Nilo Pacadar, Joel

Tan and Richard de los Santos are found GUILTY beyond
reasonable doubt of Murder without any aggravating or
mitigating circumstance and are each hereby sentenced
to suffer the penalty of reclusion perpetua;

2. Accused-appellant Joselito Tamayo is found GUILTY

beyond reasonable doubt of the crime of Homicide with
the generic aggravating circumstance of abuse of
superior strength and, as a consequence, he is sentenced
to an indeterminate penalty of TWELVE (12) YEARS
of prision mayor as minimum to TWENTY (20) YEARS
of reclusion temporal as maximum;

Page 9
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RULE 130 OBJECT EVIDENCE
State v. Tatum
Annotate this Case
58 Wn.2d 73 (1961)
360 P.2d 754
THE STATE OF WASHINGTON, Respondent, v. RALPH TATUM, Appellant.[*]
No. 35383.
The Supreme Court of Washington, Department Two.
April 6, 1961.
Moore & Rabideau, for appellant.
Roger L. Olson, for respondent.
*74 DONWORTH, J.
Ralph Tatum (hereinafter called appellant) was convicted of the crime of
first-degree forgery and was sentenced to life imprisonment as an habitual
criminal.
The essential facts of the case are summarized as follows:
One William Tousin, of Pasco, received monthly welfare checks from the
state of Washington. In February, 1960, Tousin did not receive his check
(the checks were generally mailed to a rooming house in Pasco where
Tousin resided.) The mail was normally left on a window ledge in the
hallway of the rooming house. Appellant resided at the same place. Tousin's
February check for $28.90 was endorsed and cashed at Sherman's Food
Store in Pasco by someone other than the payee, Tousin.
PINEDAPCGRNMAN
An employee of the store, Caroline Pentecost, testified that although she
could not specifically recall the above-mentioned transaction, the initials
appearing on the face of the check were hers. She also testified that
whenever a check was presented to her for payment at the store, the store
manager had instructed her to initial it and then insert it into a "Regiscope"
machine. This machine is designed to simultaneously photograph, through
two separate lenses, both the check and the person facing the machine.
When it was discovered that the endorsement of the payee was a forgery,
the Regiscope film of the transaction was sent to the Regiscope distributor
in Portland to be developed. The processed film shows both the check and
the person of appellant (from his waist up) with the food store in the
background. Upon the trial, both the negative and the print therefrom were
admitted in evidence, over appellant's objection.
This appeal presents two questions for our consideration:
(1) Were the Regiscope films (the negative and the print) authenticated
sufficiently to warrant their admission into evidence? (2) Did Phillip Dale,
the Regiscope distributor, qualify as an expert witness with respect to the
filming process despite the fact that he was not a photographer by
profession?
*75 [1] At the outset, with respect to the question of the admissibility of the
Regiscope films, it should be noted that this court has for many years
encouraged the admission and use of demonstrative evidence, including
photographs. See Kelly v. Spokane, 83 Wash. 55, 145 Pac. 57 (1914);
Norland v. Peterson, 169 Wash. 380, 13 P. (2d) 483 (1932); Cady v.
Department of Labor & Industries, 23 Wn. (2d) 851, 162 P. (2d) 813 (1945).
There is equally well-established precedent for the proposition that the
admission or rejection of photographs as evidence lies within the sound
discretion of the trial court. See Quayle v. Knox, 175 Wash. 182, 27 P. (2d)
Page 10
115 (1933); State v. Hardamon, 29 Wn. (2d) 182, 186 P. (2d) 634 (1947);
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
State v. Little, 57 Wn. (2d) 516, 358 P. (2d) 120 (1961). We have also held
that the trial court's discretion extends to the sufficiency of identification.
See Kellerher v. Porter, 29 Wn. (2d) 650, 189 P. (2d) 223 (1948), and the
cases cited therein.
[2] What quantum of authentication do courts require before a photograph
may be admissible in evidence? It is simply this that some witness (not
necessarily the photographer) be able to give some indication as to when,
where, and under what circumstances the photograph was taken, and that
the photograph accurately portray the subject or subjects illustrated. See 9
A.L.R. (2d) 899. The photograph need only be sufficiently accurate to be
helpful to the court and the jury. See Hassam v. J.E. Safford Lbr. Co., 82 Vt.
444, 74 Atl. 197 (1909); Blake v. Harding, 54 Utah 158, 180 Pac. 172 (1919).
[3] Witness Pentecost testified that she recognized the background shown
in the picture as that of the food store, and, as mentioned previously, she
also testified as to the store's standard procedure of "regiscoping" each
individual who cashed a check at the store. Phillip Dale testified at length
concerning the Regiscope process. The testimony of these two witnesses
taken together amounted to a sufficient authentication to warrant the
admission of the photograph (both the print and the negative) into
evidence.
The authentication supplied by the testimony summarized above, of course,
did not preclude appellant from *76 attempting to prove that the individual
portrayed was someone other than appellant, that the photograph was
inaccurate in one or more respects, that appellant was somewhere else at
the moment the photograph was taken, or any other such defense. But
these arguments go to the weight rather than to the admissibility of the
exhibits in question. In our opinion, the Regiscope exhibits, coupled with the
other evidence produced by the state, sufficed to establish a prima facie
case of first-degree forgery.
PINEDAPCGRNMAN
[4, 5] The second question (whether or not witness Dale properly qualified
as an expert witness respecting the Regiscope process) presents less
difficulty. The fact that Dale was not a professional photographer and may
have not understood all of the technical details of the process, did not, from
an evidentiary standpoint, disqualify him from expressing an opinion in his
testimony as to the possibility of altering a given Regiscope print. This court
has many times held that the question of whether or not a witness is
qualified to express an expert opinion lies within the sound discretion of the
trial court. See Wilson v. Wright, 52 Wn. (2d) 805, 329 P. (2d) 461 (1958);
Kelly v. Valley Constr. Co., 43 Wn. (2d) 679, 262 P. (2d) 970 (1953); and
White v. Fenner, 16 Wn. (2d) 226, 133 P. (2d) 270 (1943). In view of witness
Dale's testimony that he personally had developed "four to five hundred
thousand" individual Regiscope films, we hardly think that the trial court
abused its discretion in this regard.
The judgment of the trial court is affirmed.
FINLEY, C.J., MALLERY, OTT, and HUNTER, JJ., concur.
NOTES
[*] Reported in 360 P. (2d) 754.
Page 11
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RULE 130 OBJECT EVIDENCE
270 Phil. 128
FIRST DIVISION
G.R. No. 80505, December 04, 1990
THE PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. MARIO
TANDOY Y LIM, DEFENDANT-APPELLANT.
DECISION
CRUZ, J.:
The decision of the Regional Trial Court of Makati, Branch 133
dated October 13, 1987, convicting Mario Tandoy of the crime of violation
of Art. II, Sec. 4 of Rep. Act No. 6425 known as the Dangerous Drugs Act of
1972, is before us on appeal.
The information against the accused-appellant read as follows:
That on or about the 27th day of May 1986, in the Municipality of Makati,
Metro Manila, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused without being authorized by law, did then
and there willfully, unlawfully and feloniously sell eight (8) pieces of dried
marijuana flowering tops, two (2) pieces of dried marijuana flowering tops
and crushed dried marijuana flowering tops, which are prohibited drug, for
and in consideration of P20.00.
Upon arraignment, Tandoy entered a plea of not guilty. After trial, Judge
Buenaventura J. Guerrero rendered a decision the dispositive portion of
which declared:
PINEDAPCGRNMAN
WHEREFORE, the Court finds Mario Tandoy y Lim guilty beyond reasonable
doubt of violation of Sec. 4, Art. II, Rep. Act No. 6425, as amended, and is
hereby sentenced to life imprisonment and to pay a fine of P20,000.00 and
cost.
The marijuana confiscated in this case is declared confiscated and forfeited
and ordered turned over to the Dangerous Drugs Board for proper disposal.
SO ORDERED.
The accuse-appellant raises the following assignment of errors in this
appeal:
1. The Court a quo erred in finding accused guilty beyond reasonable doubt
of the crime charged despite lack of evidence to prove that he sold
marijuana to the poseur-buyer.
2. The Court a quo erred in admitting in evidence against the accused Exh.
"E-2-A" which is merely a xerox copy of the P10.00 bill allegedly used as
buy-bust money.
The evidence of the prosecution may be summarized as follows:
On May 27, 1986, at about 3:30 p.m., Lt. Salido, Jr. of the Makati Police
Station dispatched Pfc. Herino de la Cruz, and Detectives Pablo
R. Singayan, NicanorCandolesas, Luisito de la Cruz, Estanislao Dalumpines,
Antonio Manalastas and Virgilio Padua to conduct a buy-bust operation
at Solchuaga St., BarangaySingkamas, 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
Page 12
accused-appellant, who said without preamble: "Pare, gusto mo
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
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.
The arresting officers brought Tandoy to the Office of the Anti-Narcotics
Unit, Makati Police Station, for investigation by Detective
Marvin Pajilan. The accused-appellant chose to remain silent after having
been informed of his constitutional rights.
These events were narrated under oath by De la
Cruz, Singayan and Pajilan.[1] Microscopic, chemical
and chromotographic examination was performed on the confiscated
marijuana by Raquel P. Angeles, forensic chemist of the National Bureau of
Investigation, who later testified that the findings were positive. The
marijuana was offered as an exhibit.[2]
As might be expected, the accused-appellant had a different story. His
testimony was that from 1:30 to 4:00 p.m. of the day in question, he was
playing "cara y cruz" with 15 other persons along Solchuaga St. when
somebody suddenly said that policemen were making arrests. The players
grabbed the bet money and scampered. However, he and a certain Danny
(another "cara y cruz" player) were caught and taken to the Narcotics
Command headquarters in Makati. There they were mauled and warned
that if they did not point to their fellow pushers, they would rot in jail. The
accused-appellant denied he had sold marijuana to Singayan and insisted
the bills taken from him were the bet money he had grabbed at the
"cara y cruz" game.[3]
PINEDAPCGRNMAN
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.
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 v. Khan, supra) along a
Page 13
street at 1:45 p.m. (People v. Toledo, G.R. No. 67609, November 22, 1985,
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
140 SCRA 259), and in front of a house (People v. Policarpio, G.R. No. 69844,
February 23, 1988).
As the Court has also held, "What matters is not an existing familiarity
between the buyer and the seller but their agreement and the acts
constituting the sale and delivery of the marijuana leaves."[6]
Under the second assigned error, the accused-appellant invokes the best
evidence rule and questions the admission by the trial court of
the xerox copy only of the marked P10.00 bill.
The Solicitor General, in his Comment, correctly refuted that contention
thus:
This assigned error centers on the trial court's admission of the P10.00 bill
marked money (Exh. E-2-A) which, according to the appellant, is excluded
under the best evidence rule for being a mere xerox copy. Apparently,
appellant erroneously thinks that said marked money is an ordinary
document falling under Sec. 2, Rule 130 of the Revised Rules of Court which
excludes the introduction of secondary evidence except in the five (5)
instances mentioned therein.
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,
othersubstitutionary evidence, like a xerox copy thereof, is therefore
admissible without the need of accounting for the original.
PINEDAPCGRNMAN
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.
SO ORDERED.
Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.
[1]
TSN, October 1, 1986; TSN, November 19, 1986; TSN, January 7, 1987.
[2]
Exhibit "D."
[3]
TSN, February 16, 1987, p. 6; Exhibit "E."
[4]
144 SCRA 429.
[5]
170 SCRA 681.
[6]
People v. Rodriguez y Teves, 172 SCRA 742.
Page 14
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
Meyers v. United States, 171 F.2d 800 (D.C. Cir. 1948) WILBUR K. MILLER, Circuit Judge.

Annotate this Case Bleriot H. Lamarre and the appellant, Bennett E. Meyers, were jointly
indicted for violating the District of Columbia statute[1] which denounces
U.S. Court of Appeals for the District of Columbia Circuit - 171 F.2d 800 perjury and subornation thereof. Three counts of the indictment charged
(D.C. Cir. 1948) Lamarre with as many separate perjuries in his testimony before a sub-
November 8, 1948 committee of a committee of the United States Senate constituted to
investigate the national defense program, and three more counts accused
Meyers of suborning the perjuries of his codefendant.
171 F.2d 800 (1948)
Lamarre pleaded guilty to all three charges when he was arraigned on
MEYERS December 19, 1947, a few days after the return of the indictment. Meyers
v. entered a plea of not guilty and was tried before a jury in the District Court
UNITED STATES. of the United States for the District of Columbia. At the conclusion of the
government's evidence, he moved for a judgment of acquittal, which the
No. 9797.
court denied. Meyers did not take the stand or introduce any evidence.
United States Court of Appeals District of Columbia Circuit. Having been found guilty under each of the three counts against him, he
appeals.
Argued June 14, 1948.
Meyers was an officer in the United States Army. In 1939, while stationed at
Decided November 8, 1948. Wright Field, near Dayton, Ohio, he organized under the laws of Ohio a
corporation called Aviation Electric Corporation, and paid into its treasury
Writ of Certiorari Denied February 14, 1949.
the sum of $500 to cover its authorized capital consisting of 250 shares of
*801 Mr. Robert T. Bushnell, of Boston, Mass., with whom Messrs. Russell common stock having a par value of $2 each. At his direction, a certificate
Hardy and Smith W. Brookhart, both of Washington, D. C., were on the for 224 shares was issued to Miss June Ballaou, an employee at Wright
brief, for appellant. Field, and the remaining shares were divided between one David Johnson
and one Robert L. Pine. The newly organized company engaged in
Mr. George Morris Fay, U. S. Atty., of Washington, D. C., with whom Mr. manufacturing parts and accessories for airplanes, and soon had on hand
Edward Molenof, Sp. Asst. to the Atty. Gen., and Messrs. John W. Fihelly, orders from the Signal Corps of the United States Army aggregating about
Sidney S. Sachs and Ross O'Donoghue, Asst. U. S. Attys., all of Washington, $20,000.
D. C., were on the brief, for appellee.
The appellant had become acquainted with Lamarre and his wife as early as

Page 15
*802 Before WILBUR K. MILLER, PRETTYMAN and PROCTOR, Circuit Judges. 1936 or 1937 and apparently was fond of them. Late in 1939, he went to see

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RULE 130 OBJECT EVIDENCE
Lamarre in California, where the latter was employed by an airplane
company, and suggested that he come to Dayton to become associated with
Aviation Electric in an executive capacity. The invitation was accepted and in
January, 1940, Lamarre was made secretary-treasurer of the corporation
and the Ballaou certificate for 224 shares was transferred to him without
valuable consideration. A few months thereafter he became president of
the company.
From its modest beginning in 1939 the operations of Aviation Electric
Corporation expanded substantially and rapidly. It obtained contracts to
furnish parts to large corporations engaged in producing aircraft for the
United States Army. Meyers advanced considerable sums for working
capital and took therefor the company's promissory notes which were
secured by the pledge and delivery to him of certificates, endorsed in blank,
evidencing all its capital stock.
The appellant was transferred to Washington in 1941 and the next year
became Deputy Chief of Procurement of Aircraft and Aircraft Parts for the
Army Air Force. Meanwhile, Aviation Electric was operating successfully and
profitably so that by the end of 1942 all Meyers' loans had been repaid.
Large profits were earned as long as the war continued, but the termination
of actual hostilities so reduced the demand for its products that the
corporation was dissolved in September, 1946.
Desiring to ascertain whether there had been instances of waste, fraud,
corruption, mismanagement, excessive profits or inefficiency in the nation's
war effort, entailing as it did the hurried expenditure of billions of dollars for
national defense, the United States Senate created the investigating
committee to which reference has been made. In the course of an inquiry
into government contracts with a large airplane supplier, the appellant
testified before that committee. It developed during the hearing that
Aviation Electric Corporation had been a sub-contractor on government
work and that Lamarre had been its president from 1940 until its dissolution
PINEDAPCGRNMAN
in 1946. In order to ascertain what connection, if any, the appellant had had
with Aviation Electric, the subcommittee subpoenaed Lamarre, who
testified on Saturday, October 4, and Monday, October 6, in 1947. That
testimony *803 brought about the indictment which was the genesis of the
case now before us.
Three of the indictment's counts charged that Lamarre: (1) knowingly and
willfully testified falsely that Meyers "was not financially interested in or
connected with the Aviation Electric Corporation of Dayton and Vandalia,
Ohio," during the years 1940 to 1947, inclusive; (2) knowingly and willfully
testified falsely that a Cadillac automobile purchased in Washington by
Meyers, and paid for by Aviation Electric Corporation, was purchased for the
corporation and for its use; (3) knowingly and willfully testified falsely that
the sum of $10,000, paid by means of Aviation Electric's checks, for
decorating and furnishing Meyers' Washington apartment "was a gift from
himself, Bleriot H. Lamarre."
Although the appellant was convicted on three counts, each of which
charged him with suborning one of Lamarre's perjuries, he received only
one sentence.[2] That being true, the judgment must be affirmed if appellant
was properly convicted on any one of the three counts against him.[3] We
shall consider, nevertheless, appellant's assignments of error with respect
to all the counts.
1. As to Meyers' financial interest in or connection with Aviation Electric
Corporation.
On this subject, the first count of the indictment includes the following: "* *
* In the course of his [Lamarre's] testimony it became material whether
Page 16
Bennett E. Meyers was financially interested in or connected with the
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RULE 130 OBJECT EVIDENCE
Aviation Electric Corporation of Dayton and Vandalia, Ohio, during the years
1940, 1941, 1942, 1943, 1944, 1945, 1946, or 1947; and being questioned in
that regard, Bleriot H. Lamarre on October 4 and October 6, 1947, and in
the District of Columbia wilfully and contrary to his said oath testified falsely
that Bennett E. Meyers was not financially interested in or connected with
the Aviation Electric Corporation of Dayton and Vandalia, Ohio, during those
years or any of them, whereas in truth, as Bleriot H. Lamarre knew, Bennet
E. Meyers was financially interested in and connected with the said Aviation
Electric Corporation during each and all the years 1940, 1941, 1942, 1943,
1944, 1945, 1946 and 1947."
Appellant's counsel earnestly assert and ably argue that Lamarre did not
testify before the subcommittee that Meyers was not financially interested
in or connected with Aviation Electric; but that, quite to the contrary,
Lamarre told the subcommittee Meyers actually owned the business. If that
contention be well founded, it is a complete defense to the charge that
Meyers suborned the perjury alleged in the first count. It is elementary that
one cannot be convicted of suborning a perjury which was not in fact
committed; that is to say, there can be no subornation of perjury if there
was no perjury. It is equally true that one cannot be convicted of suborning
perjury if the alleged perjurious statement actually was not made by the
alleged perjuror.
*804 No matter how unorthodox, unpatriotic, reprehensible or criminal the
evidence may tend to show Meyers' conduct to have been, his conviction
under the first count cannot stand if Lamarre did not in fact testify as the
count charged that he did. So, at the threshold of our consideration of the
first count, we must decide whether Lamarre in fact told the subcommittee
Meyers was not financially interested in or connected with Aviation Electric.
If it be found that he did so testify, then it will be pertinent to see whether
the statement was true or false; and, if false, whether Meyers suborned it.
PINEDAPCGRNMAN
Whether Lamarre represented to the subcommittee that Meyers was not
financially interested in or connected with the company is to be determined
by finding the meaning or significance which is fairly attributable to all
Lamarre's testimony before the subcommittee. A stenographically reported
record of that testimony was put in evidence and is before us.
Appellant's insistence that Lamarre did not say what the first count charged
him with saying, but said exactly the opposite, is based on the fact that
Lamarre was asked this question, "So you understood all of the time that for
all practical purposes, he [Meyers] owned the business?"; and that Lamarre
answered by saying, "That is right," and then continued with other
statements to that effect.
This bit of testimony, taken from its context and read without reference to
or consideration of the remainder of Lamarre's evidence, supports
appellant's contention that, regardless of the truth or falsity of the
statement which the first count attributed to Lamarre, he simply did not say
what he is alleged to have said, but definitely stated exactly the contrary.
So, if Lamarre's answer to the quoted question were all he said on the
subject, we should have no difficulty in accepting appellant's argument, and
in holding that Lamarre did not commit the first perjury charged against him
and that, therefore, Meyers was wrongly convicted of suborning it.
We turn first to the subcommittee counsel's examination of Lamarre, in the
course of which he made the statement upon which appellant now relies as
a defense to the first count, in order to see whether the context[4] of the
statement limits the absolute *805 meaning which it appears to have when
standing alone. The setting in which the statement appears shows that in
making it Lamarre was referring to the occasion in 1940 when a large part of
the stock had just been transferred to him and endorsed back to Meyers to
serve as collateral. It is, however, perfectly clear from the evidence as a
Page 17
whole that Lamarre did not intend to be understood as meaning that from
1940 until 1947 Meyers was for all practical purposes the owner of the
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RULE 130 OBJECT EVIDENCE
business. For example, when Lamarre was asked, "It [the stock] belonged to
Meyers all the time?", he answered, "No, sir, it did not." He was then asked,
"Well, then, when did it become yours, actually yours?" and he replied,
"When the notes were paid off." He added, "It had always been mine as a
matter of fact."
Even if this were not so, and if it be conceded arguendo that Lamarre
unqualifiedly stated with respect to the entire period involved that Meyers
had no financial interest in or connection with the corporation, it would
remain true that he also later testified to the subcommittee that Meyers
had no interest at any time after Lamarre's association with the company
began except as a creditor, and that he ceased to have even that interest
after 1942.[5] The criminal nature of perjury is not removed, the Supreme
Court has said, by the fact that the perjurer later in the proceeding states
the truth; that is to say, recantation following perjury does not destroy its
criminality. United States v. Norris, 1937, 300 U.S. 564, 573, 57 S. Ct. 535, 81
L. Ed. 808. We see no reason why the principle should not apply with even
greater force when perjury follows truthful testimony and so is the last and
unrecanted choice of its author. In the present case, even if the true
statement (that Meyers was for all intents and purposes the owner of the
business) be given the full implication and effect which appellant finds in it,
and so be regarded as applying to all the years involved, it was followed by
falsehood when Lamarre emphatically and repeatedly swore Meyers had no
sort of interest in the company after 1942. His last choice was perjury.
From the quotations shown in the margin as note 3, it will be observed that,
just before making the statement which appellant says absolves him,
Lamarre stated, "I would not say" it was Meyers' stock. And shortly after
having made the statement upon which appellant relies, Lamarre insisted
that the endorsed certificates were held for Meyers only so long as the
company owed him money, that he considered the stock as income to
himself, that it did not belong to Meyers all the time but actually became his
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[Lamarre's] when the notes were paid.[6] Although he had given no
consideration to Meyers or to any other person *806 for the shares
transferred to him at Meyers' instance, he told the senators, "It had always
been mine as a matter of fact" and that he felt under no obligation to pay
Meyers for it.
A reading of all Lamarre's testimony on the subject shows convincingly and
beyond any doubt that he was trying to get the subcommittee to believe
Meyers had no actual or beneficial stock ownership in the company, and
that he bore to it merely the relation of creditor, a relation which ended in
1942. This is true despite the fact that he said he understood Meyers owned
the company for all practical purposes. That statement may not be isolated
and thereby given a meaning wholly different from the clear significance of
the testimony considered as a whole. Appellant himself states the law to be
that a charge of perjury "may not be sustained by the *807 device of lifting
a statement of the accused out of its immediate context and thus giving it a
meaning wholly different than that which its context clearly shows." He
cites Fotie v. United States, 8 Cir., 137 F.2d 831, and other cases to the same
effect. The principle is sound, but has no application here. It is the appellant
who seeks to sustain his defense "by the device of lifting a statement of the
accused out of its immediate context and thus giving it a meaning wholly
different than that which its context clearly shows." Since a charge of
perjury may not be sustained in that manner, it follows corollarially that a
defense to a charge of perjury may not be established in that fashion.
From the evidence as a whole we have no difficulty in concluding that
Lamarre told, and intended to tell, the subcommittee that Meyers held no
stock in the company, either actually or beneficially, after the shares were
issued to Lamarre in 1940; that Meyers had no interest of any kind after
that except he was a creditor and held the capital stock as collateral; and
that after 1942 Meyers had no sort of interest in or connection with the
Page 18
company. Having so determined, it is next necessary to ascertain whether
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RULE 130 OBJECT EVIDENCE
that statement was false and known to be false to Lamarre when he
testified, so as to stamp it as perjury.
Not only did Lamarre plead guilty to the charge of perjury made against him
because of his representation to the subcommittee that Meyers was not
interested in or connected with the corporation; he also testified fully and
freely at Meyers' trial that he had knowingly and willfully falsified in that
respect before the subcommittee, and that in fact Meyers was at all times
the real owner of the company.
Lamarre testified further at the trial that, during the years involved, his own
salary as secretary and treasurer, and later as president, was fixed at sums
varying from $20,000 to $30,000 per annum and that it was so shown on
the books of the corporation. Company checks were regularly drawn to
Lamarre's order in payment of his ostensible salary but in fact he was
allowed to keep as his own only a modest compensation. By far the larger
part of the salary credited to Lamarre on the books of the corporation was
remitted by him to Meyers, usually in the form of cashiers' checks. A similar
arrangement was followed with respect to the salary of T. E. Readnower,
Lamarre's brother-in-law, whose apparent salary was $18,600, of which
some $15,000 went to Meyers. By this device and other subterfuges, such
as the purchase of an automobile and the furnishing of an apartment,
Meyers received more than $150,000 from the company during the years
involved, in addition to the repayment to him of the sums which he
advanced from time to time for working capital. The checks by which
Aviation Electric paid the purported salaries, and the cashiers' checks by
which the money was transmitted to Meyers, were in evidence and in our
view constitute sufficient corroboration of Lamarre's testimony that he
testified falsely before the subcommittee.
Meyers' subornation of this perjury was proved by the evidence of Lamarre
that on the day before his first appearance before the subcommittee the
appellant instructed him to swear "Meyers had no financial interest or any
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other interest other than the money that he had loaned to the corporation
and which had been repaid to him by the middle of 1942." It thus appears
that, contrary to appellant's contention, the evidence showed Lamarre
actually made the statements and representations to the subcommittee
which the first count charged; that his testimony was false and was given
knowingly and willfully; and that Meyers suborned the perjury.
2. As to the count which charged Lamarre with perjury concerning the
purchase of the Cadillac automobile.
As to this count[7] the indictment charged the following: "* * * In the course
of his [Lamarre's] testimony on these dates it became material whether a
Cadillac automobile which he testified Bennett E. Meyers had purchased
with funds of the Aviation Electric Corporation of Dayton and Vandalia,
Ohio, on or about January 1, 1942, had been purchased for *808 the
personal use of Bennett E. Meyers or for the use of the said Corporation.
The fact was, as Bleriot H. Lamarre then knew, that that automobile had
been purchased for the personal use of Bennett E. Meyers. Bleriot H.
Lamarre nevertheless wilfully and contrary to his said oath testified falsely
before the subcommittee on the dates and at the place aforesaid that that
Cadillac automobile had been purchased for the Aviation Electric
Corporation and for the use of the Aviation Electric Corporation." With
respect to this charge the appellant makes in his brief the following
categorical comment: "The transcript disclosed that Lamarre had given no
testimony whatsoever that the car had, or had not, `been purchased for the
personal use of Bennett E. Meyers or for the use of the said
Corporation.' There is not a word in this transcript of any testimony by
Lamarre, false or true, that the car referred to had been purchased for the
Page 19
personal use of appellant or for the use of the Corporation." A factual issue
is thus raised which is to be resolved by resorting to the record.
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RULE 130 OBJECT EVIDENCE
Lamarre swore to the subcommittee that at the end of 1941 he asked
General Meyers to buy an automobile for him and that Meyers did buy in
Washington the Cadillac sedan; that it remained in Washington for several
weeks because when he came for it the weather was bad and he was forced
to return to Dayton on a train. He also testified substantially as follows: he
left the car with Meyers until he later was able to transport it to Dayton,
where it was used as the company car[8] by him and Curnutt, Meyers' father-
in-law, who also was an Aviation Electric employee. Aviation Electric paid for
the automobile and carried it on its books as an asset until 1944 or 1945,
when Curnutt bought it from the company at its then book value of $1,400.
The sale was made because the company had no further use for the car. It
is, therefore, plain that Lamarre told the subcommittee substantially what
the second count of the indictment charged.
At the trial Lamarre testified that his statements to the subcommittee were
false and that in truth Meyers telephoned him from Washington and
instructed him to send a company check for approximately $3,000 as he
wanted to purchase a Cadillac; that the check was sent and the automobile
was purchased but that the company never had possession of it.
There was ample corroboration of Lamarre's testimony that the automobile
was bought for and used by Meyers. The manager of the garage at Hotel
2400, where Meyers' apartment was located, testified that early in 1942 the
appellant stored in the hotel garage a new 1942 blue Cadillac which he kept
there until he left on August 27, 1944. The car was kept as "live storage,"
meaning that it was cleaned nightly and used almost daily by Meyers or his
wife. The storage was charged to Meyers and the garage manager never
saw anyone drive the car other than Meyers and his wife.
Calvin Mettee, who was a corporal in the army, testified he was assigned to
the appellant as a chauffeur in the spring of 1942. He told of the new blue
1942 Cadillac being in the hotel garage and that it was his duty *809 to see
that the car was clean, brushed out and ready to go at all times. During the
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year 1942 it was never out of the garage for longer than a week. It bore
District of Columbia license tags during 1942, 1943 and 1944. When Meyers
married again in 1943, the witness was instructed to explain to Mrs. Meyers
how to drive the blue Cadillac. Mrs. Meyers personally used the car in 1943
and at times the witness would drive her on shopping tours or to social
functions. It was stored in the hotel garage thoughout the year 1943 and
until the summer of 1944 when Meyers was transferred to Wright Field.
Mettee was transferred there also. At Meyers' direction he flew in an army
airplane from Dayton to Washington in order to drive the blue Cadillac to
Dayton where he delivered it to Meyers' quarters. At appellant's order, he
arranged for the transfer of the title of the automobile from Curnutt to
Meyers or his wife. The car was constantly in appellant's possession while at
Wright Field. When Meyers retired from active service in 1945, he directed
Mettee to drive the 1942 Cadillac from Dayton to his residence at Bayville,
Long Island, which was done.
In the latter part of October, 1947, after Mettee had been released from the
army, he went from his home in Rochester, Pennsylvania, to Huntington,
New York, to see Meyers, at the latter's request. At Meyers' suggestion he
registered at the hotel under an assumed name. Meyers told him that he
was being investigated and that Lamarre was trying to blackmail him. He
asked Mettee to testify, if he were questioned, that he had obtained from
Lamarre authority to drive the blue Cadillac on the occasions when he did
drive it, and to say that during the winter of 1942 and 1943 Lamarre drove
the car from Dayton to Washington but due to heavy weather he could not
return and was forced to leave the car in Washington, and that the witness
did not know how the car was taken to Dayton. Meyers told him that if his
testimony concerning the automobile turned out to be of any value he
would give him $2,000.
Proof of subornation was furnished when, with respect to a conversation
Page 20
between Meyers and Lamarre in a hotel lobby on October 3, 1947, Lamarre
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RULE 130 OBJECT EVIDENCE
was asked, "Was there any discussion about a Cadillac automobile?", to
which he answered: "I was to say that the Cadillac automobile was
purchased for the company by Meyers on my instructions and that I had
gone to Washington a few weeks after the car was delivered and I had
driven it back to Dayton, and that on several occasions I had driven the car
to Washington, but because of bad weather I had gone back on the train
and it remained here in Washington for some time and then later on when I
came in again I would pick the car up and drive it home." He was then
asked, "Was that the truth?", to which he replied, "No, it was not."
Our conclusion is that the second count was sustained. Lamarre testified to
the subcommittee in the manner charged; his testimony was admitted by
him, and otherwise proved, to be false; and evidence was introduced that
Meyers suborned the perjury.
3. As to furnishing and decorating the apartment.
On this subject the pertinent portion of the indictment is as follows: "* * *
In the course of his [Lamarre's] testimony on these dates it became material
whether the cost of redecorating the apartment of Bennett E. Meyers at
2400 Sixteenth Street, N. W., Washington, D. C., in the year 1941, in the
approximate amount of $10,000 had been paid for out of the funds of the
Aviation Electric Corporation of Dayton and Vandalia, Ohio. Knowing the
facts to be that it had, Bleriot H. Lamarre wilfully and contrary to his oath
falsely testified before the subcommittee on the dates and at the place
aforesaid that the aforesaid redecoration and cost of redecoration of the
said apartment of Bennett E. Meyers was a gift from himself, Bleriot H.
Lamarre."
PINEDAPCGRNMAN
During his appearance before the subcommittee on the morning of
Saturday, October 4, 1947, Lamarre said he had never made Meyers a
present of a value of more than $100 and that all gifts from him and his
wife, such as those made at Christmas, amounted to no more than $400.
After lunching with Meyers and one of the latter's attorneys, he volunteered
at the beginning *810 of the afternoon session this statement: "There is one
thing I would like to say before we proceed. That is, you laid a great deal of
stress this morning on what you called gifts to General Meyers. I would like
to amplify my statements on that, because at the time I did not consider it a
gift, but it was after General Meyers had come to Washington, he had an
apartment decorated, and I paid for the decoration of that apartment, and
the furnishings."[9]
He said to the subcommittee that the cost of furnishing the apartment was
paid by Aviation Electric checks, which was true; but he sought to transform
the transaction from a company expenditure into a personal gift from him
by belatedly charging it to his own salary account, after originally charging it
to expense. It was indeed true, therefore, as he told the senators, that the
checks, although drawn by the company, were charged against his personal
salary.
At the trial of Meyers, Lamarre admitted the expenditure was by the
company and not by him. His confession was corroborated because the
essential falsity of his testimony before the subcommittee is shown in this:
although bookkeeping entries were made to charge $10,000 to his salary
account, that account itself was false, and fraudulently set up.
His actual and comparatively meagre salary could not cover the decorating
cost. *811 There was no real difference in result to the company between
the device of setting up a fictitious salary and remitting most of it to Meyers
in cashiers' checks, and the device of charging to a fictitious salary account
Page 21
company checks drawn for Meyers' personal benefit. The latter was simply
another method of secretly channeling Aviation Electric's money to Meyers.
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RULE 130 OBJECT EVIDENCE
The company's books and cancelled checks furnish corroboration of
Lamarre's testimony that he had sworn falsely with respect to furnishing the
apartment. Moreover, Miss Davis, the decorator, told the jury she dealt
with Meyers only, although Lamarre told the subcommittee he informed
her of his desire to present the appellant with the cost of the decoration.
Miss Davis said Meyers told her "that he would give me checks on a little
company that he owned or had an interest in I don't remember just the
words, but they satisfied me enough so that I was willing to take the check."
She added that he gave her the name of the company as "the Aviation
Electric Corporation of Dayton or Vandalia."
Appellant asserts Lamarre's characterization of the payment as a gift was
made under the prodding of the subcommittee; a partially true but wholly
immaterial assertion.[10] He originally and voluntarily described the
transaction so that in law and in the fair meaning of language it amounted
to a gift even though he disliked the word. Lamarre was reluctant to use the
word "gift" only because he thought of a gift "as some item you give a man,"
and his position before the subcommittee was that the $10,000 was a
payment of a moral obligation, a return due because of Meyers' favors to
him. Moreover, as has been pointed out, Lamarre entered a plea of guilty
with respect to this charge. As he had done with respect to the first two
counts, Lamarre testified that he committed this perjury at Meyers'
suggestion and solicitation.
From what has been said, we find the third count to have been established.
Lamarre gave before the subcommittee the testimony charged as perjury;
its falsity was proved by him and by corroborative evidence; and there was
proof that Meyers suborned it.
In addition to his reasons for reversal which have been discussed and
disposed of in the foregoing portion of this opinion, appellant argues his
conviction should be set aside because the subcommittee before which
Lamarre gave his perjured testimony was not lawfully constituted as such,
PINEDAPCGRNMAN
and therefore was not "a competent tribunal" spoken of by the perjury
statute. He discerns a variance between the indictment's allegation that the
Senate committee "on April 19, 1947, created a subcommittee" and the
proof from the committee chairman and counsel that a subcommittee was
created in mid-April by the chairman, who announced to the full committee
the names of the senators whom he had appointed as members of it.
Appellant says the subcommitte was invalid because it was not created by a
resolution of the full committee. The argument lacks substance because the
evidence shows it is the unvarying practice of the Senate to follow the
method of creating and appointing sub-committees which was employed in
this instance. After consideration of all appellant's points with respect to the
subcommittee sitting on October 4, we conclude that it was legally
constituted.
The argument that a quorum was not present on October 4, 1947, because
only one of the three senators then present had been among the five
originally appointed in April, obviously confuses the creation of the
subcommittee with the appointment of its personnel. On October 6, 1947,
however, only two senators were present at the hearing. Since they were a
minority of the subcommittee, they could not legally function except to
adjourn. For that reason, the testimony of Lamarre given on that day cannot
be considered as perjury nor can appellant be convicted of suborning it.
*812 But practically all Lamarre's testimony was given on October 4, when a
quorum was present. The proceedings of that day contain the perjurious
statements described in all three counts, and his examination on October 6
was largely repetitious.
A further ground for reversal is the court's alleged error in denying
appellant's motion before trial to dismiss the indictment. It is asserted that
the section of the District of Columbia Code, under which the indictment
Page 22
was laid, "has nothing whatever to do with any perjury or subornation of
perjury committed in connection with an inquiry by a committee of the
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RULE 130 OBJECT EVIDENCE
House of Representatives or Senate of the United States." In other words,
appellant says only the federal perjury statute, 18 U.S.C.A. §§ 231, 232
[1948 Criminal Code, 18 U.S.C.A. §§ 1621, 1622], was applicable. To accept
the argument would be to overrule our decisions in O'Brien v. United States,
1938, 69 App.D.C. 135, 99 F.2d 368, and Behrle v. United States, 1938, 69
App. D.C. 304, 100 F.2d 714, which we are not prepared to do.
Appellant's assignment of error concerning the court's conduct, his criticism
of the court's charge to the jury, and his complaint concerning government
counsel's argument to the jury, do not impress us as requiring discussion;
but we deem it proper to refer, as briefly as possible, to the proposition
advanced in the first division of the dissenting opinion which is filed
herewith.
At the opening of the dissent it is said, "The testimony given by Lamarre
before the Senate Committee was presented to the jury upon the trial in so
unfair and prejudicial a fashion as to constitute reversible error."
The reference is to the fact the William P. Rogers, chief counsel to the
senatorial committee, who had examined Lamarre before the
subcommittee and consequently had heard all the testimony given by him
before that body, was permitted to testify as to what Lamarre had sworn to
the subcommittee. Later in the trial the government introduced in evidence
a stenographic transcript of Lamarre's testimony at the senatorial hearing.
In his brief here the appellant characterizes this as a "bizarre procedure" but
does not assign as error the reception of Rogers' testimony. The dissenting
opinion, however, asserts it was reversible error to allow Rogers to testify at
all as to what Lamarre had said to the subcommittee, on the theory that the
transcript itself was the best evidence of Lamarre's testimony before the
subcommittee.
PINEDAPCGRNMAN
That theory is, in our view, based upon a misconception of the best
evidence rule. As applied generally in federal courts, the rule is limited to
cases where the contents of a writing are to be proved.[11] Here there was
no attempt to prove the contents of a writing; the issue was what Lamarre
had said, not what the transcript contained. The transcript made from
shorthand notes of his testimony was, to be sure, evidence of what he had
said, but it was not the only admissible evidence concerning it. Rogers'
testimony was equally competent, and was admissible whether given
before or after the transcript was received in evidence. Statements alleged
to be perjurious may be proved by any person who heard them, as well as
by a reporter who recorded them in shorthand.
A somewhat similar situation was presented in Herzig v. Swift & Co., 146
F.2d 444, decided by the United States Court of Appeals for the Second
Circuit in 1945. In that case the trial court had excluded oral testimony
concerning the earnings of a partnership on the ground that the books of
account were the best evidence. After pointing out the real nature and
scope of the best evidence rule,[12] the court said, 146 F. *813 2d at page
446: "* * * Here there was no attempt to prove the contents of a writing;
the issue was the earnings of a partnership, which for convenience were
recorded in books of account after the relevant facts occurred. Generally,
this differentiation has been adopted by the courts. On the precise question
of admitting oral testimony to prove matters that are contained in books of
account, the courts have divided, some holding the oral testimony
admissible, others excluding it. The federal courts have generally adopted
the rationale limiting the `best evidence rule' to cases where the contents of
the writing are to be proved. We hold, therefore, that the district judge
erred in excluding the oral testimony as to the earnings of the partnership."
A contention identical with that made in the dissenting opinion here was
rejected by the United States Court of Appeals for the Second Circuit in
Page 23
1912 in Brzezinski v. United States, 198 F. 65, 66. In that opinion the court
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RULE 130 OBJECT EVIDENCE
said: "The first fact for the government to prove was the giving of the
testimony charged in the indictment. It called the stenographer who took
the notes of the proceedings before the grand jury. He testified that he took
down the questions and answers that were put to Brzezinski on that day;
that he made a transcription in typewriting from the notes, made this
transcription himself, did not dictate it. * * * An assistant United States
attorney who was present in the grand jury room also testified to the
substance of what Brzezinski said on that occasion. It is contended that the
court erred in admitting this testimony on the ground that it was `not the
best evidence.' This is a frivolous objection. Any one who has heard an oral
statement made and remembers it may testify to what was said. * * *"
The Court of Appeals for the Third Circuit held, in Re Ko-Ed Tavern, 1942,
129 F.2d 806, 810, the best evidence rule does not have the application
which the dissent here seeks to give it: "As to Light's half ownership of the
bankrupt corporation, William Kochansky, president of the company,
testified at the hearing before the referee that he and Light each owned
fifty per cent of the capital stock of the corporation but that no stock
certificates had ever been issued to either of them. The appellant objected
to this testimony on the ground that the books of the bankrupt corporation
were the best evidence of the matter under inquiry and that the parol
evidence offered was inadmissible because the nonproduction of the books
had not been satisfactorily explained. It is quite apparent that the appellant
misconceives the scope of the `best evidence' rule. That rule is applicable
when the purpose of proffered evidence is to establish the terms of a
writing. See 4 Wigmore on Evidence, 3rd Ed., § 1178. In this case there was
no attempt to prove by parol either book entries or the terms of written
instruments. * * *"
To the same effect is Boitano v. United States, 1925, 7 F.2d 324, 325, in
which the Ninth Circuit said: "* * * it was equally competent to prove that
testimony [of the plaintiff in error] by a witness who was present at the trial
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and heard the testimony given, regardless of whether the testimony was
reported or whether it was not. 22 C.J. 344."
As we have pointed out, there was no issue as to the contents of the
transcript, and the government was not attempting to prove what it
contained; the issue was what Lamarre actually had said. Rogers was not
asked what the transcript contained but what Lamarre's testimony had
been.
After remarking, "* * * there is a line of cases which holds that a
stenographic transcript is not the best evidence of what was said. There is
also a legal cliche that the best evidence rule applies only to documentary
evidence", the dissenting opinion asserts that the rule is outmoded and that
"the courts ought to establish a new and correct rule." We regard the
principle set forth in the cases which we have cited as being, not a legal
cliche, but an established and sound doctrine which we are not prepared to
renounce.
With the best evidence rule shown to be inapplicable, it is clearly seen that
it was neither "preposterously unfair", as the appellant asserts, nor unfair at
all, to permit the transcript of Lamarre's evidence to be introduced after
Rogers had testified. *814 Since both methods of proving the perjury were
permissible, the prosecution could present its proof in any order it chose.
There is no substance in the criticism, voiced by the appellant and in the
dissent, of the fact that Rogers testified early in the unduly protracted trial
and the transcript was introduced near its close. Appellant's counsel had a
copy of the transcript from the second day of the trial, and had full
opportunity to study it and to cross-examine Rogers in the light of that
study. The mistaken notion that, had the transcript been first put in
evidence, Rogers' testimony would have been incompetent is, of course,
based on the erroneous idea that the best evidence rule had application.
Page 24
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RULE 130 OBJECT EVIDENCE
It is quite clear that Meyers was in no way prejudiced by the order in which
the evidence against him was introduced, nor does it appear that his
position before the jury would have been more favorable had the transcript
been offered on an earlier day of the trial.
The matters discussed in the second division of the dissenting opinion have
been covered adequately, we think, in the earlier portion of this opinion.
Since we perceive no prejudicial error in appellant's trial, the judgment
entered pursuant to the jury's verdict will not be disturbed.
Affirmed.
PRETTYMAN, Circuit judge (dissenting).
I am of strong opinion that the judgment in this case should be reversed. I
think so for two reasons.
I. The testimony given by Lamarre before the Senate Committee was
presented to the jury upon the trial in so unfair and prejudicial a fashion as
to constitute reversible error.
Lamarre testified before the Committee in executive session, only Senators,
Mr. William P. Rogers, who was counsel to the Committee, the clerk, the
reporter, and the witness being present. An official stenographic record was
made of the proceedings. The testimony continued for two days, and the
transcript is 315 typewritten pages. When Meyers was indicted, he moved
for a copy of the transcript. The United States Attorney opposed, on the
ground that the executive proceedings of a Senate Committee are
confidential. The court denied Meyers' motion.
When the trial began, the principal witness called by the Government was
Mr. Rogers. He was asked by the United States Attorney, "Now, will you tell
the Court and the jury in substance what the testimony was that the
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defendant Lamarre gave before the Committee concerning the Cadillac
automobile?" Two counts of the indictment related to this automobile.
The court at once called counsel to the bench and said to the prosecutor:
"Of course, technically, you have the right to proceed the way you are
doing. * * * I do not think that is hearsay under the hearsay rule, but it
seems to me * * * that, after all, when you have a prosecution based on
perjury, and you have a transcript of particular testimony on which the
indictment is based, that you ought to lay a foundation for it or ought to put
the transcript in evidence, instead of proving what the testimony was by
someone who happens to be present, who has to depend on his memory as
to what was said."
Counsel for the defense, objecting, insisted that the procedure was
"preposterously unfair". The trial judge said that it seemed to him that the
transcript ought to be made available to defense counsel. That was then
done, but the prosecutor insisted upon proceeding as he had planned with
the witness.
Mr. Rogers then testified: "I will try to give the substance of the testimony. *
* * I am sure your Honor appreciates that I do not remember exactly the
substance of the testimony. The substance of testimony was this, * * *."
And then he gave "in substance" the testimony in respect to the Cadillac
car. The same process was followed in respect to the matters covered by
the other counts of the indictment, i. e., the redecoration of Meyers'
apartment and Meyers' interest in the Aviation Electric Corporation.
Defense counsel reserved part of his cross-examination until he could read
the transcript.
*815 The notable characteristics of this testimony of Rogers are important.
In each instance, the "substance" was a short summation, about half a
printed page in length. The witness did not purport to be absolute in his
Page 25
reproduction but merely recited his unrefreshed recollection, and his
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RULE 130 OBJECT EVIDENCE
recollection on each of the three matters bears a striking resemblance to
the succinct summations of the indictment. It is obvious that what the
witness gave as "substance" was an essence of his own distillation and not
an attempt to reproduce the whole of Lamarre's testimony. There are
differences between Rogers' recollection and the transcript which are vital
in the case.
The foregoing was on Wednesday, February 25th, the second day of the
trial. On Tuesday, March 9th, which was two weeks later and the eleventh
day of the trial, the Government, as it was about to close its case, offered
the whole transcript of Lamarre's testimony in evidence as an exhibit, and it
was received without objection. The prosecutor and one of his assistants
then read to the jury such portions of the transcript as they deemed
material. Defense counsel then read the portions which they deemed
material.
Upon the reserved cross-examination of Rogers, the following occurred:
"Q. Is it not a fact that nowhere in his testimony did the defendant Lamarre
on October 4th or 6th, 1947, testify that Bennett E. Meyers was not
financially interested in or connected with the Aviation Electric
Corporation? A. I don't think he ever used those words.
"Q. Is it not a fact that all of his testimony, taken as a whole, negatives such
an interpretation?
"Mr. Fay: I think that is purely a question of law.
"The Court: Objection sustained, I do not think that is proper cross-
examination."
Defense counsel inquired of Rogers if it were not a fact that "the substance
of Lamarre's testimony with reference to the Cadillac car" was so-and-so.
The court interrupted and said that counsel was asking the witness "to
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construe" Lamarre's testimony and that since the jury had heard the
testimony read it would have to determine what its meaning was. Counsel
for the defense agreed with that proposition and moved to strike all of
Rogers' direct testimony as to what Lamarre's testimony had been. The
court denied the motion, saying that Rogers had not, on direct, been
"interpreting" Lamarre but had stated "the substance", which the court said
"is an entirely different thing". Rogers then answered as to his
"recollection", commenting, "I stated at the outset it is just my recollection."
He repeated that comment in effect several times. Finally counsel asked a
specific question as to Lamarre's use of the word "gift" (which we note was
the key word in Count Five), and the prosecutor objected on the ground
that "the record [i. e., the transcript] speaks for itself". The court sustained
the objection. A similar question was then asked, objected to, and the
objection sustained. Thereupon counsel dropped that line of examination.
To my mind, the foregoing procedure was, as defense counsel characterized
it, "preposterously unfair". It lacked the minimum elements of fair play
essential to our concept of a fair trial. I reach my conclusion upon both
practical and theoretical considerations. The problem has both aspects.
The practical elements are these: The transcript showed exactly what
Lamarre told the Committee, word for word. But the words and expressions
charged to him by the indictment do not appear in the transcript. Whether
he testified as alleged, whether he said what is alleged to be the truth, or
whether he said what is alleged to be false, were matters of inference, or
conclusion, or summation, or "substance", to be gathered from his answers
to many questions. Mr. Rogers was the counsel who interrogated Lamarre
before the Committee. The Committee was the actual complainant in the
perjury charge. Rogers was its representative.
Thus, the sum of the practical aspect of the matter is that the prosecutor
Page 26
put to the jury at the opening of his case, out of the mouth of the
complainant, under oath and on the stand, the complainant's interpretation
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RULE 130 OBJECT EVIDENCE
of the alleged perjured testimony, translating it into approximately what the
indictment attributed to the alleged perjurer. *816 I need not elaborate the
tremendous advantage thus gained by the Government, an advantage later
magnified by what occurred on attempted cross-examination.
The difference between the presentation of elemental facts and the piecing
of them together so as to reach a conclusion is basic.[1] One is evidence and
the other argument. The principle runs through much of the law of
evidence.
I doubt that anyone would say that the prosecutor could first have put into
evidence the transcript of Lamarre's testimony and thereafter have
produced Rogers to give to the jury from the witness box his own
summation of it. He would have been met with a ruling that "the transcript
speaks for itself". Indeed, exactly that developed. The prosecutor first
produced the oral summation, and it was admitted. Then he produced the
transcript. Then, when defense counsel attempted to cross-examine as to
"the substance", he was blocked because of the presence of the transcript.
Can a prosecutor do by so simple and obvious a maneuver that which the
law otherwise forbids as unfair? Can he thus transform into sworn evidence
from the box that which is otherwise only argument from the rail? I do not
think so. In the presence of the unimpeached transcript, even though it was
temporarily on counsel table and not yet in the clerk's hands, summation
and interpretation was argument and not evidence.
Nor was the prejudice cured by the availability of the transcript to defense
counsel for cross-examination. If that were so in this case, the same
doctrine would admit in evidence any opinion, or description, or summation
of elemental facts otherwise provable in precise accuracy. The impression
given by a succinct summation by a live witness on the stand cannot be
corrected or offset by the later reading of a long, cold record. It is my view
that for this exceedingly practical reason the reception of Rogers'
summation in evidence was not permissible.
PINEDAPCGRNMAN
From the theoretical viewpoint, I realize that there is a line of authority that
(absent or incompetent the original witness) a bystander who hears
testimony or other conversation may testify as to what was said, even
though there be a stenographic report.[2] And there is a line of cases which
holds that a stenographic transcript is not the best evidence of what was
said.[3] There is also a legal cliche that the best evidence rule applies only to
documentary evidence.[4] The trial judge in this case was confronted with
that authority, and a trial court is probably not the place to inaugurate a
new line of authority. But I do not know why an appellate court should
perpetuate a rule clearly outmoded by scientific development. I know that
courts are reluctant to do so.[5] I recognize the view that such matters
should be left to Congress. But rules of evidence were originally judge-made
and are an essential part of the judicial function. I know of no reason why
the judicial branch of Government should abdicate to the legislative branch
so important a part of its responsibility.
I am of opinion, and quite ready to hold, that the rules of evidence reflected
by the cases to which I have just referred are outmoded and at variance
with known fact, and that the courts ought to establish a new and correct
rule. The rationale of the so-called "best evidence rule" requires that a party
having available evidence which is relatively certain may not submit
evidence which is far less certain. The law is concerned with the true fact,
and with that alone; its procedures are directed to that *817 objective, and
to that alone. It should permit no procedure the sole use of which is to
obscure and confuse that which is otherwise plain and certain.
We need not venture into full discussion of all the principles involved.[6] As
between two observers of an event, the law will not accept the evidence of
one and exclude that of the other, because the law cannot say which is
more accurate. But as between a document itself and a description of it, the
law accepts the former and excludes the latter, because the former is
Page 27
certain and the latter is subject to many frailties. So as between the
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RULE 130 OBJECT EVIDENCE
recollection of the parties to a contract evidenced by a writing and the
writing itself, the law rejects the former and accepts the latter. To be sure,
the writing may be attacked for forgery, alteration or some such
circumstance. But absent such impeachment, the writing is immutable
evidence from the date of the event, whereas human recollection is subject
to many infirmities and human recitation is subject to the vices of prejudice
and interest. Presented with that choice, the law accepts the certain and
rejects the uncertain. The repeated statement in cases and elsewhere that
the best evidence rule applies only to documents is a description of practice
and not a pronouncement of principle. The principle is that as between
human recollections the law makes no conclusive choice; it makes a
conclusive choice only as between evidence which is certain and that which
is uncertain.
It may be remarked at this point that the transcript in the case at bar is a
document, not challenged for inaccuracy or alteration. It possesses every
characteristic which the most literal devotee of established rules of
evidence could ascribe to written evidence of a contract as justification for
preference of such writing over the recollection of the parties.
In my view, the court iterates an error when it says that the best evidence
rule is limited to cases where the contents of a writing are to be proved. The
purpose of offering in evidence a "written contract" is not to prove the
contents of the writing. The writing is not the contract; it is merely evidence
of the contract. The contract itself is the agreement between the parties.
Statutes such as the statute of frauds do not provide that a contract be in
writing; they provide that the contract be evidenced by a writing, or that a
written memorandum of it be made. The writing is offered as evidence of an
agreement, not for the purpose of proving its own contents. A deed to real
estate is different, being actually the instrument of conveyance, although
there is authority that it too is merely evidence of the agreement between
the parties.
PINEDAPCGRNMAN
The doctrine that stenographic notes are not the best evidence of testimony
was established when stenography was not an accurate science. The basis
for the decisions is succinctly stated in the 1892 case quoted as leading by
Professor Wigmore: "Stenographers are no more infallible than any other
human beings, and while as a rule they may be accurate, intelligent, and
honest, they are not always so; and therefore it will not do to lay down as a
rule that the stenographer's notes when translated by him are the best
evidence of what a witness has said, in such a sense as to exclude the
testimony of an intelligent bystander who has heard and paid particular
attention to the testimony of the witness."[7]
But we have before us no such situation. Stenographic reporting has
become highly developed, and official stenographic reports are relied upon
in many of the most important affairs of life. Even as early as 1909, a court
referred to "Experience having demonstrated the impartiality and almost
absolute accuracy of the notes of court stenographers" as the reason for
legislation making admissible as evidence a court stenographer's report.[8] In
the present instance, at least, no one has disputed the correctness of the
transcript.
From the theoretical point of view, the case poses this question: Given both
(1) an accurate stenographic transcription of a *818 witness' testimony
during a two-day hearing and (2) the recollection of one of the complainants
as to the substance of that testimony, is the latter admissible as evidence in
a trial of the witness for perjury? I think not. To say that it is, is to apply a
meaningless formula and ignore crystal-clear actualities. The transcript is, as
a matter of simple, indisputable fact, the best evidence. The principle and
not the rote of the law ought to be applied.
I do not suggest that a stenographer's report is unimpeachable; that
question is not here.
Page 28
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RULE 130 OBJECT EVIDENCE
I find some support for my view in the authorities. As early as 1878 the
Supreme Court, in ruling upon the problem, seemed to qualify the
traditional view. It said that "Where a stenographer has not been
employed, it can rarely happen that anyone can testify to more than the
substance of what was testified * * *." (Italics supplied.)[9] And Volume 2,
Section 693, of Wharton's Criminal Evidence, after discussing the cases, has
this to say: "However, since it is a primary rule of evidence that the best
evidence must be produced, it would seem that since practically all
testimony is now taken by stenographers, a transcript of the stenographer's
notes would be the best evidence, and that oral evidence would not be
admissible when such transcript could be obtained." And there is authority
to the effect that even where a witness is permitted to give the substance of
prior testimony of another, he must reproduce as accurately as he can the
whole of that testimony and cannot give merely his own summation.[10]
II. The proof did not establish that Lamarre told the Senate Committee what
the indictment, in the first count, says he did, and it established that he told
the Committee what the third and fifth counts say is the truth. What
Lamarre told the Committee was, of course, the first factual question in the
prosecution, and thus in the defense, of Meyers.
The indictment charged that Lamarre made three specific false statements
to the Senate Committee.
I take it as elementary that an indictment must allege the commission of an
act and not mere rascality; that the offensive act must be alleged with
precision, clarity and certainty; that upon the trial the Government must
prove the commission of the act alleged, and that no other misdeed,
however proved, will support conviction; and that an accused need defend
against no proof except that of the act alleged. The issue now before us
cannot be resolved correctly, or indeed even understood, unless we first
note with attentive care exactly what this indictment says Lamarre told the
Senate Committee.
PINEDAPCGRNMAN
The first count of the indictment charged that Lamarre testified falsely that
"Meyers was not financially interested in or connected with the Aviation
Electric Corporation of Dayton and Vandalia, Ohio, during those years [i. e.,
1940, 1941, 1942, 1943, 1944, 1945, 1946 or 1947] or any of them".
That is a very specific, precise charge. Also it is quite clear and easily
understood. It relates to financial interest or connection of any sort on the
part of Meyers in or with the corporation. It relates to any one of the years
1940-47. Conviction required the Government to prove the allegation as
made. Conversely, Meyers was called upon to defend against the allegation
made, and none other.
First, we note that Lamarre never made the direct assertion in the language
the indictment recites. No one claims that he did. As we have already noted,
Mr. Rogers testified, "I don't think he ever used those words." And when
asked, in reference to finances, "So that Lamarre did not say, in summary, as
you understood it, that Meyers had no connection with the company?" Mr.
Rogers replied, "I never said he said that."
Second, we note that Lamarre repeatedly testified to the precise contrary of
what the indictment charged he said. Financial interest in or connection
with a corporation is of two principal sorts, owner and creditor. Lamarre
testified that Meyers had both. He told the Committee that Meyers put up
all the money for the stock upon the incorporation. He identified the
original book *819 entry which showed Meyers as the sole original
stockholder. He said that the named incorporators were "dummies". He said
that when the stock was transferred on the records to him (Lamarre), he
endorsed it in blank and left it at the company office where Meyers had
access to it. He also testified that Meyers put up any money which the
corporation needed and that Meyers was the sole creditor of the
corporation. He even testified flatly, as follows:
Page 29
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RULE 130 OBJECT EVIDENCE
Q. "That [the stock transfer to Lamarre] was just a bookkeeping transaction,
and you held the stock and then you endorsed them over to Meyers and he
took the certificates, is that correct?
"Mr. Lamarre: Yes.
"[Q.] So you understood all of the time that for all practical purposes he
owned the business, did you not?
"Mr. Lamarre: That is right.
"[Q.] He put all of the money in and he owned all of the stock?
"Mr. Lamarre: That is right."
And again the record shows:
Q. "In other words, without any payment on your part, and he [Meyers]
made the arrangement that you were to endorse them in blank and he
would take possession of them, is that correct?
"Mr. Lamarre: Yes."
And again Lamarre testified: "Of course, as I said, the company actually had
no money; it was borrowed from General Meyers."
He testified that at the end of 1941 the corporation owed Meyers $30,000,
and he identified a list which showed that Meyers advanced $58,310 to the
corporation, of which amount $20,000 was advanced in 1942.
The very first questions by defense counsel upon the cross-examination of
the witness Rogers at the trial developed the nub of the matter:
"Q. Mr. Rogers, did I understand you to say that Lamarre testified that he or
General Meyers, for all practical purposes, owned the stock, owned the
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company: Aviation Electric? A. Well, he said both ways. He said he was the
owner of the stock
"Q. Yes? A. but he said, when we pressed him with questions, in view of the
fact that Meyers had put up all the money and had given the stock in the
company, for all practical purposes Meyers was the owner.
"Q. So that actually, as the testimony was left, he didn't deny that Meyers
was, in that sense at least, interested in the company? A. No.
"Q. And in that sense at least financially interested in the company? A. That
is right.
"Q. And he did not deny or state falsely in that sense that Meyers was
connected with the company? A. No."
It is impractical to quote in this opinion the whole of the testimony upon the
point. But to my mind the record of what Lamarre told the Senate
Committee conclusively shows that he made perfectly clear to the
Committee, by repeated and unequivocal statements, that Meyers was the
originator and first sole stockholder of the corporation; that when the stock
was transferred on the record to him (Lamarre), he was merely a record
holder, having paid nothing for the stock and having endorsed the
certificate in blank and left it physically available to Meyers; that Meyers
was the sole financial backer of the company, and that during the years
1940-42 Meyers was a creditor of the corporation in large amounts, his
loans evidenced by notes and secured by pledge of all the stock. Throughout
his testimony there was no intimation that the corporation had any financial
support of any sort except that of Meyers. Lamarre made many statements
and representations which the record may indicate were false and which he
later repudiated. But he did not, as best I can read the record, even suggest
that Meyers had no financial interest in or connection with the corporation
Page 30
in any of the years 1940-47. And that is what the indictment says he told the
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RULE 130 OBJECT EVIDENCE
Committee, and that is what the Government had to prove in order to
sustain conviction.
I do not agree with the court that appellant's contention in this connection
is based upon one question and answer. As I understand it, the contention is
based upon the *820 whole of Lamarre's testimony before the Committee,
upon many questions and answers. Certainly my conclusion is.
Neither do I agree with the court's view that if Meyers' interest in the
corporation during any of the years named be established, the conviction
must be sustained. Lamarre is alleged by the indictment to have told the
Committee that Meyers had no interest in the corporation during the years
1940, 1941, 1942, 1943, 1944, 1945, 1946, 1947, or any of them. The
Government had to prove that Lamarre made that statement. If Lamarre
told the Committee that Meyers had an interest during three of the eight
years named, he did not say what the indictment says he said. Upon such
proof, conviction under the indictment as drawn could not stand. We
cannot rewrite the indictment so as to allege that Lamarre said something
else. It is perfectly true that if Lamarre made the statement ascribed to him
by the indictment, and if it were proved that Meyers had an interest in any
one of those years, Lamarre's perjury would be established. Therein lies the
confusion. It seems to me that the court is thinking about the proof
necessary to establish the falsity of the statement recited in the indictment,
whereas the question under consideration at this point is the proof
necessary to establish that Lamarre made the alleged statement. This
particular question is not "Was the alleged statement false?" The question is
"Did Lamarre make the alleged statement?" It seems plain to me that if, as
the court finds, Lamarre asserted and never denied Meyers' interest in
some of the years 1940-47, he did not state that Meyers had no interest
in any of those years. The Government has simply failed to prove one of the
essentials of its case under the indictment as drawn.
PINEDAPCGRNMAN
In the third place, in respect to this count, everybody agrees that Lamarre
made it clear to the Committee that Meyers was a creditor of the
corporation in large amounts during the years 1940, 1941 and 1942; that, in
fact, he supplied all the money the corporation needed when it was in need.
Upon the trial below, the insistence of the witness Rogers was that Lamarre
told the Committee that Meyers was not financially interested "except as a
creditor". The same exception runs through every claim in the
Government's brief before us. The opinion of the court recites that "Meyers
advanced considerable sums for working capital and took therefor the
company's promissory notes which were secured by the pledge and delivery
to him of the certificates evidencing all its capital stock" and that "by the
end of 1942 all Meyers' loans had been repaid." The court finds and recites
that Lamarre insisted that the stock "did not belong to Meyers all the time
but actually became his [Lamarre's] when the notes were paid." The notes
were paid at the end of 1942. So the court's view of Lamarre's testimony is
that Meyers owned the stock in 1940, 1941 and 1942. The court says that
Lamarre tried to persuade the Committee that Meyers bore to the
corporation "merely the relation of creditor"; and the court concludes from
the evidence as a whole that Meyers had no interest "except that he was a
creditor and held the capital stock as collateral".
The unspoken major premise to the Government's contention and the
court's position is that a creditor upon a promissory note of a corporation
and pledgee of all its capital stock has no financial interest in or connection
with the corporation. I cannot agree with that proposition. Of course, the
term "interest in" has many meanings, some of them narrow and technical.
But we are not construing a statute, and, moreover, the whole expression
before us is "interested in or connected with". We are examining an
allegation in an indictment which purports to recite what a witness said on
the stand in a congressional hearing. The indictment recites that his
testimony was that a certain person had no financial interest in or
Page 31
connection with a corporation. The witness actually said that the person
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was a substantial and secured creditor of the corporation. The witness may
have been guilty of perjury, but he clearly was not guilty of the perjury
charged by the indictment.
The second charge against Meyers (Count Three of the indictment) related
to a Cadillac automobile. The charge was premised upon allegations in the
indictment that "The fact was, as Bleriot H. Lamarre then knew, that that
automobile had been *821 purchased for the personal use of Bennett E.
Meyers. Bleriot H. Lamarre nevertheless wilfully and contrary to his said
oath testified falsely * * * that that Cadillac automobile had been purchased
for the Aviation Electric Corporation and for the use of the Aviation Electric
Corporation."
Thus, the indictment recites, first, what the truth was and, second, what
Lamarre told the Committee. Again we must note with care exactly what
the indictment charged. The critical question posed by its allegations was:
For whose use was the car purchased? According to the indictment, it was
perjury to say that the purchase was "for the use" of the corporation
because in truth it was "for the personal use" of Meyers.
The testimony of Lamarre relating to the automobile is comparatively short.
It came near the end of the second day of his testimony. He made no direct
statement to the Committee as to whose use the car was purchased for. His
meaning in that respect is a matter of inference. What he said was that the
company had one car, a Cadillac, purchased from the Capitol Cadillac
Company in Washington, where Meyers lived (the corporation was in
Dayton and Vandalia, Ohio); that Meyers picked out the car, bought it and
took delivery on it; that Meyers had access to it; that Meyers had the keys
to it; that the car remained in Washington; that Meyers kept it in his garage;
that the car was bought and titled in the company name; that he (Lamarre)
was the only officer in the company who had access to the car; that Meyers
made arrangements to get the insurance; that the car was insured in
Washington; that the car cost $3,000 and was sold to Meyers' father-in-law
PINEDAPCGRNMAN
for $1,400; that it was sold because "We had no further use for it"; that they
"had not had too much use for it." None of these elemental facts has been
disputed; as to them Lamarre testified truthfully before the Committee.
The contention of the Government and the holding of the court is that this
factual testimony is so positive to the effect that the car was purchased "for
the use of the Aviation Electric Corporation" as to make it perjury, since the
fact was that the purchase was "for the personal use" of Meyers.
I have some difficulty in drawing a clear line between purchases of cars for
the use of a corporation and purchases of cars by a corporation for the
personal use of an officer, or sole stockholder, or sole creditor. Frequently,
it seems to me, the use of the officer, stockholder or creditor is, in many
senses, a use of the corporation. At any rate, it is frequently so considered
in business circles. Be that as it may, I cannot find in Lamarre's testimony a
distinction between company use and Meyers' personal use so clear and
sharp as to constitute one a perjury when the other is the fact. Lamarre
certainly told the Committee that Meyers selected the car, arranged for its
purchase, bought it in Washington, kept it in his garage in Washington (the
company being located in Ohio), had the keys, and arranged for the
insurance. To my mind, it is a logical and fairly obvious conclusion from that
testimony that the car was purchased for Meyers' use. It seems to me that
what the indictment recites as the truth is as fair an inference as any other
from Lamarre's actual testimony.
The Government and the court put much stress upon Lamarre's reference to
the car as the "Company car" and to his having driven it once from Ohio to
Washington. But those scraps of testimony are not, to my mind, an
affirmation that the car was purchased for the use of the company and not
of Meyers.
I can find in Lamarre's testimony no clear inference that the car was
Page 32
purchased for the use of the corporation in critical contradistinction to a
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RULE 130 OBJECT EVIDENCE
purchase for the use of Meyers. Unless his testimony was clear in that
difference, conviction upon this indictment, as drawn, cannot be sustained.
One is perjury, the other truth, the indictment says. Unless he said one and
not the other, prosecution for this perjury fails.
The problem posed by this phase of the case is not that presented when a
witness swears both truthfully and falsely in the same testimony. That
witness may be guilty of perjury in that part of his testimony which is false,
even though on other matters he testifies truthfully, and even though he
recants that which is false. In the case at bar, Lamarre testified to a number
of simple facts about the car, all of *822 which facts are admittedly true.
The question is: Did he thereby convey a false impression? If what he
actually said fits what the indictment says was the truth of the transaction,
he is not guilty of perjury. In other words, in my view, if either of two
impressions, one true and the other false, can be gathered from a true
recitation of elemental facts, conviction for perjury fails.
The third count of the indictment charged that Lamarre, knowing that "the
cost of redecorating the apartment of Bennett E. Meyers * * * had been
paid for out of the funds of the Aviation Electric Corporation", testified
falsely before the Senate Committee that the cost of the redecoration "was
a gift from himself, Bleriot H. Lamarre."
Again we must note with care what the indictment says. It makes the
difference between "paid for out of the funds of" the corporation and "a gift
from himself" the difference between truth and perjury. I have some doubt
as to the validity of the count because of its vagueness; the payment might
be correctly described by both the expressions used. But my dissent does
not arise from that view.
Lamarre clearly, emphatically and in complete detail testified before the
Committee that the cost of redecorating Meyers' apartment was paid for
out of the funds of the corporation. No one disputes that literal fact. He said
PINEDAPCGRNMAN
that the bills were paid by corporation checks, drawn on corporation bank
accounts, and first charged as sales expenses on the corporate books. He
identified the corporate checks. In all these respects he testified to what
was the literal, actual truth, and no one has since alleged otherwise. So far
there is, and can be, no dispute but that he testified to what the indictment
says was the truth.
The difficulty arises because it is alleged that Lamarre falsely characterized
the transaction as a gift from himself to Meyers.
Lamarre told the Committee that the cost of redecorating Meyers'
apartment ($10,000), having first been charged on the corporate books as a
business expense, was later removed from that account and entered as a
charge against his own salary account. His statements in these respects
were true; that was exactly what was done. The real issue of truth or falsity
revolves about the salary account itself. The Government says that the
account was spurious, that Meyers was the owner of the corporation, that
Lamarre never had any such salary, and that the account was merely a
device for siphoning profits to Meyers. But the indictment does not raise
that issue. We cannot rewrite the indictment to charge that whereas the
truth was that Meyers owned the corporation and all its profits, including
what was charged as Lamarre's salary, Lamarre falsely represented that the
salary credited to him was his own and that charges against it were gifts by
him.
Much is made of the word "gift". The facts as shown by the record are quite
simple. When Lamarre appeared before the Committee, he was
interrogated at length throughout the morning concerning his and the
corporation's relationship with Meyers, during the course of which much
discussion was had of "gifts" from Lamarre to Meyers and from Meyers to
Lamarre. The decorating of the apartment was not mentioned. After the
Page 33
luncheon recess, Lamarre said: "There is one thing I would like to say before
we proceed. That is, you laid a great deal of stress this morning on what you
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RULE 130 OBJECT EVIDENCE
called gifts to General Meyers. I would like to amplify my statements on
that, because at the time I did not consider it a gift, but it was after General
Meyers had come to Washington, he had an apartment decorated, and I
paid for the decoration of that apartment, and the furnishings." Throughout
that afternoon and the next morning, Lamarre was questioned at great
length and in great detail concerning this transaction. He identified the
checks and explained at great length the book entries, and repeatedly
reasserted his claim that he caused this payment because of what Meyers
had done for him. Until almost the close of this interrogation, the
expression "gift" was not used. Then the following occurred:
"Mr. Rogers: What do you consider this $10,000 now, and I am not talking
about Saturday morning or Saturday afternoon; I am speaking now about
now; what do you consider this $10,000 was?
*823 "Mr. Lamarre: As I said, it was pretty much, I considered it a moral
obligation on my part to do something for General Meyers because of the
things he had done for me.
"Mr. Rogers: Look, you are a college graduate and president of the
corporation. You understand what I mean. Was this $10,000 a repayment
for a loan to General Meyers?
"Mr. Lamarre: No, it was not.
"Mr. Rogers: Was it part of any business deal at all?
"Mr. Lamarre: No.
"Mr. Rogers: And it had no consideration.
"Mr. Lamarre: No.
"Mr. Rogers: No legal consideration, so it must have been a gift, is that
right?
PINEDAPCGRNMAN
"Mr. Lamarre: It could have been considered a gift.
"Mr. Rogers: I do not know what it could be; what was it?
"Mr. Lamarre: I told you how I felt about it.
"Senator Cain: Let me ask one question. What could it possibly be
considered if it was not an outright gift for you said you wanted to do
something for General Meyers.
"Mr. Lamarre: That is right. In a legal sense, it undoubtedly would be a gift.
"Senator Cain: In what other sense would it be anything other than a gift or
a present or a gratuity to a friend?
"Mr. Lamarre: In my own personal feelings about it, it was that it was, I was
sort of obliged to do that for him, or I wanted to do it for him because of the
things that he had done for me.
"Senator Cain: But the transaction in itself has absolutely nothing to do with
your corporation business?
"Mr. Lamarre: That is correct.
"Senator Cain: It happens to have been paid from the corporation?
"Mr. Lamarre: That is correct.
"Senator Cain: But that was never your thought or intention; it was your
personal obligation by personal wish to a personal friend?
"Mr. Lamarre: That is correct."
Upon this record Lamarre's use of the expression "gift" plays little part in
the question of perjury. Lamarre did not urge that expression upon the
Page 34
Committee. He testified to the constituent factual elements of the
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RULE 130 OBJECT EVIDENCE
transaction. "Gift" was merely an inference, or characterization, which his
interlocutors attempted, with limited success, to put into his mouth.
It is my view that upon examination of the official stenographic transcript of
what Lamarre said to the Senate Committee, the trial court should have
directed a verdict of acquittal upon this indictment. The basic issue
presented by the defense was whether Lamarre said what the indictment
alleged that he said. The issue was not what Lamarre said generally or in
other respects. In each of the three instances, the stenographic transcript
showed that he told the Committee what the indictment alleged to be the
true fact; not only by a separate chance phrase but by the whole purport of
his testimony. That he perjured himself in other respects is irrelevant in this
prosecution.
I dissent from the decision of the court, because it seems to me to be a
departure from the basic principle that conviction can be had only upon
proof of the acts alleged in the indictment.
NOTES
[1] Title 22, § 2501, D.C.Code 1940.
[2] In imposing sentence, the trial judge said: "* * * The indictment consists
of three counts of subornation of perjury. The defendant was convicted on
all three counts. All three counts, however, involve the same transaction,
they are all part and parcel of the same transaction. In fact, it would have
been possible to have embodied all the allegations in a single count, but
quite properly, in the interest of lucidity and clarity, the Government framed
those allegations in three separate counts. In view of the fact, however, that
substantially there is just one offense, the Court is going to impose a single
sentence and is not going to impose a separate sentence on the three
counts."
PINEDAPCGRNMAN
[3] A rule frequently stated by the Supreme Court is "that a judgment upon
an indictment containing several counts, with a verdict of guilty upon each,
will be sustained if any count is good, and sufficient in itself to support the
judgment." Whitfield v. Ohio, 297 U.S. 431, 438, 56 S. Ct. 532, 534, 80 L. Ed.
778. Claassen v. United States, 142 U.S. 140, 146, 12 S. Ct. 169, 35 L. Ed.
966; Evans v. United States, 153 U.S. 584, 595, 14 S. Ct. 934, 38 L. Ed. 830;
Abrams v. United States, 250 U.S. 616, 619, 40 S. Ct. 17, 63 L. Ed. 1173;
Brooks v. United States, 267 U.S. 432, 441, 45 S. Ct. 345, 69 L. Ed. 699, 37
A.L.R. 1407. See also Gibson v. United States, 80 U.S.App.D.C. 81, 84, 149
F.2d 381, 384, and cf. Kinnison v. United States, 81 U.S.App.D.C. 312, 158
F.2d 403.
[4] The statement was made in the course of this colloquy:
"Senator Ferguson: Now, what was the agreement about the stock that was
endorsed? It was Meyers' stock, there was not any doubt about that, was
there?
"Mr. Lamarre: I would not say that, Senator.
"Senator Ferguson: Well, what would you say? You endorsed the certificate
in blank, they endorsed theirs, and you put them there where Meyers had
access to them. Now, why did you do that?
"Mr. Lamarre: The certificates were endorsed so that at any time they
wanted to borrow money, they could be used for security.
******
"Senator Ferguson: Did you borrow money on them?
"Mr. Lamarre: Yes.
Page 35
"Senator Ferguson: From whom?
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
"Mr. Lamarre: General Meyers. "Mr. Rogers: And how long did he keep them?

****** "Mr. Lamarre: Until the loan was paid off.

"Senator Ferguson: When did you borrow the money from him and give him "Mr. Rogers: I see; when was that paid off, in 1942?
the certificates?
"Mr. Lamarre: It was reduced entirely in 1941, and then went back again in
"Mr. Lamarre: In 1940. 1942 and borrowed some additional money from him when we needed
working capital.
"Senator Ferguson: How much did you borrow from him?
"Mr. Rogers: At the time the stock was transferred on the books to your
"Mr. Lamarre: There was over You mean the total or just during 1940? name, you did not pay anything for that, did you?
"Senator Ferguson: 1940, when you endorsed these certificates and gave
"Mr. Lamarre: No.
them to General Meyers.
"Mr. Rogers: That was just a book-keeping transaction, and you held the
"Mr. Lamarre: I do not know positively at that time; it was probably stock and then you endorsed them over to Meyers and he took the
$10,000.
certificates, is that correct?
"Senator Ferguson: All right. Now, he loaned the company $10,000, and you
"Mr. Lamarre: Yes.
gave him all of the certificates as security?
"Mr. Rogers: So you understood all of the time that for all practical purposes
"Mr. Lamarre: That is right. he owned the business, did you not?
"Senator Ferguson: When was that? "Mr. Lamarre: That is right.
"Mr. Lamarre: In 1940. "Mr. Rogers: He put all of the money in and he owned all of the stock?
"Senator Ferguson: What month in 1940? "Mr. Lamarre: That is right.
"Mr. Lamarre: I do not know. ******
"Mr. Rogers: He actually had the stock certificates then, did not he, after "Mr. Rogers: In other words, in that connection all of the arrangements as
that? to the stock and the transfers and how they were endorsed, that was all
"Mr. Lamarre: Yes, at one time. arranged by Meyers, was it not?

Page 36
"Mr. Lamarre: Yes.
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RULE 130 OBJECT EVIDENCE
"Mr. Rogers: And the arrangements were made between you and Ballaou
and Meyers, the three of you? He must have told Ballaou what to do.
"Mr. Lamarre: Yes, because she had never worked for the company actually.
"Mr. Rogers: Therefore, for all practical purposes now, to get back to my
question, he was the owner of that business, was he not?
"Mr. Lamarre: You could say it that way, yes."
[5] See excerpt from evidence shown as note 6.
[6] This was demonstrated when counsel for the subcommittee called
Lamarre's attention to the journal entry dated in September, 1939, showing:
"Paid in capital of $500 by B. E. Meyers for subscription to 250 shares of
common stock, par value $2, in accordance with application for charter,
filed 9-13-39. * * *"
The following testimony was given immediately thereafter:
"Mr. Rogers: * * * Did you know about that journal entry?
"Mr. Lamarre: Yes.
"Mr. Rogers: So you know that Meyers organized the company and took all
of the shares of common stock to begin with?
"Mr. Lamarre: Yes.
"Mr. Rogers: No one ever paid him for this stock that was transferred? You
did not pay him for yours?
"Mr. Lamarre: No.
"Mr. Rogers: June Ballaou never made him any payment so far as you know?
"Mr. Lamarre: No.
PINEDAPCGRNMAN
"Senator Ferguson: Is it not a fact, whether you like this word `dummy' or
not, that you were merely holding the stock for General Meyers, is not that
a fact? When you came in, Ballaou put the shares in your name and you
held them for General Meyers, and you endorsed them?
"Mr. Lamarre: No, they were held for him only so long as the company
owed him money.
******
"Senator Ferguson: They were in your name?
"Mr. Lamarre: That is right.
"Senator Ferguson: But the actual owner was General Meyers?
"Mr. Lamarre: Only because he had put up the money for them, and the
money was to be paid back to him.
******
"Mr. Lamarre: Well, there was not much of a discussion. When I returned he
told me that Ballaou was a dummy corporator and that I was to get the
stock. So when it came in, I made the transfer on the books of the
corporation.
"Mr. Rogers: What did you consider in your own mind, was that part of your
salary, was it a gift?
"Mr. Lamarre: Well, I considered it a further income.
"Mr. Rogers: When did you report it on your income tax?
"Mr. Lamarre: I did not report it.
Page 37
******
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
"Senator Ferguson: When it [the stock] became valuable, why did you not "Mr. Lamarre: That is right.
put it in as an income? It was not an income, was it? It belonged to Meyers
all of the time? "Mr. Rogers: And you thought that you were the boss?

"Mr. Lamarre: I was the boss, after David E. Johnson was no longer with the
"Mr. Lamarre: No, sir, it did not.
company.
"Senator Ferguson: Well, when did it become yours, actually yours?
******
"Mr. Lamarre: When the notes were paid off.
"Senator Ferguson: * * * You owned this stock?
"Mr Rogers: All right, now.
"Mr. Lamarre: That is right."
"Mr. Lamarre: It had always been mine as a matter of fact.
[7] Which, for convenience, will be referred to as the "second count,"
****** "second charge," or "second perjury."

"Mr. Rogers: What we are talking about is 224 shares of stock; all of a
sudden you got it for nothing. We want to know what you thought about it.
Were you supposed to eventually pay General Meyers for it? Was it
supposed to be yours then?
[8] The testimony concerning this was as follows:
"Mr. Rogers: He [Curnutt] bought a car from the company and gave the
company a note for the car?

"Mr. Lamarre: Yes, it was supposed to, I was not supposed to pay him for it.
It was supposed to be mine. As I said, he had always wanted me to, as long
as I had known him, to be set up in a business of my own; and he always had
high regard for me, and I had a high regard for him. And the stock, I
considered that when I came in, as pretty much of an opportunity to
become set up in business.
"Mr. Rogers: And you did not feel under any obligation ever to return that
stock to General Meyers?
"Mr. Lamarre: No.
"Mr. Rogers: In other words, you thought it was yours, and you thought that
"Mr. Lamarre: For the car, that is right.
"Mr. Flanagan: What kind of a car was it?
"Mr. Lamarre: Cadillac.
"Mr. Flanagan: How much did it cost?
"Mr. Lamarre: The original cost was approximately $3,000.
"Mr. Flanagan: Did he [Curnutt] use that car himself?
"Mr. Lamarre: He did after he bought it.
"Mr. Flanagan: Who had it before he bought it?

Page 38
you were the head of the company?
"Mr. Lamarre: The company had it.
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
"Mr. Flanagan: It was the company car? "Senator Ferguson: When was that?

"Mr. Lamarre: Yes. "Mr. Lamarre: In 1941.

"Mr. Flanagan: Who used it when it was a company car? "Senator Ferguson: And you gave it to him as a personal thing from you?

"Mr. Lamarre: I used it. "Mr. Lamarre: I considered it a moral

"Mr. Flanagan: And when did he buy this car? "Senator Ferguson: Not what you considered it.

"Mr. Lamarre: I do not know exactly when it was; it may have been '44. "Mr. Lamarre: A moral obligation. All right. I gave him, I paid for

"Senator Ferguson: How much did he pay for it? "Senator Ferguson: You personally?

"Mr. Lamarre: Or '45. He paid book value for it, $1,400 and some." "Mr. Lamarre: paid for the decoration and the furnishings of that
apartment.
[9] The following are excerpts from the cross-examination of Lamarre which
followed his voluntary statement: "Mr. Rogers: Go ahead, Senator.

"Senator Ferguson: You personally? "Senator Ferguson: You personally paid for the decoration and the
furnishings of an apartment in Washington?
"Mr. Lamarre: Yes. I considered it
"Mr. Lamarre: That is right.
"Mr. Rogers: Who did you eat with this noon?
"Senator Ferguson: In 1941?
"Mr. Lamarre: General Meyers.
"Mr. Lamarre: That is right.
"Mr. Rogers: You discussed this with him, then?
******
"Mr. Lamarre: No, I did not.
"Mr. Rogers: What did it amount to?
******
"Mr. Lamarre: Approximately $10,000.
"Senator Ferguson: You say you made a gift of the decoration and some
furniture of an apartment? "Mr. Rogers: And you claim that you forgot that this morning?

Page 39
"Mr. Lamarre: Yes. "Mr. Lamarre: As I said, I did not consider it as a gift.

Intelligentia et Scientia Semper Mea

RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
"Senator Ferguson: What was it? "Senator Ferguson: Why was it charged, because the government refused to
allow it?
"Mr. Lamarre: And we were talking in terms of gifts, and when a gift, I think
of some item that you give the man. "Mr. Lamarre: No, the government knew nothing about that.

"Mr. Rogers: Let us go through the details of it again. You had a "Senator Ferguson: Why did you change it?
conversation, and he mentioned that he was moving.
"Mr. Lamarre: I felt that it was not a proper business expense and I changed
"Mr. Lamarre: That is right. it.

"Mr. Rogers: And what did you say? "Senator Ferguson: Well, now, at first you charged it up as a business
expense?
"Mr. Lamarre: I said that I would like to take care of the decorating expense,
the furniture expense for him. "Mr. Lamarre: That is right, I did."

"Mr. Rogers: Yes. [10] The prodding occurred on October 6, when appellant claims a quorum
of the subcommittee was not present. Prior to that, however, and on
"Mr. Lamarre: As more or less a return for all of the things that he had done October 4, Senator Ferguson asked Lamarre, "You say you made a gift of the
for me in the past. decoration and some furniture of an apartment?", to which he replied,
****** "Yes."

"Mr. Lamarre: The $10,000 was charged to my salary account. [11] Keene v. Meade, 1830, 3 Pet. 1, 28 U.S. 1; Herzig v. Swift & Co., 2 Cir.,
1945, 146 F.2d 444; In re Ko-Ed Tavern, 3 Cir., 1942, 129 F.2d 806, 142 A.L.R.
"Senator Ferguson: When? 357; R. Hoe & Co. v. Com'r, 2 Cir., 1929, 30 F.2d 630; Boitano v. United
States, 9 Cir., 1925, 7 F.2d 324.
"Mr. Lamarre: In 1941.
[12] In doing so the court quoted with approval the following statement
"Senator Ferguson: At the time you made it?
from McKelvey, Evidence, 604, 5th Ed., 1944: "In its modern application, the
"Mr. Lamarre: No, not immediately. best evidence rule amounts to little more than the requirement that the
contents of a writing must be proved by the introduction of the writing
"Senator Ferguson: How long afterwards? itself, unless its absence be satisfactorily accounted for." See also 4
Wigmore, Evidence, §§ 1174, 1177-1182, 3d Ed., 1940.
"Mr. Lamarre: It was in December of that year.

Page 40
[1] I use some of the words of Section 1 of Chapter I of Wigmore on
Evidence, and refer to that authority for a discussion of the subject.
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
[2] Johnson v. Umsted, 8 Cir., 1933, 64 F.2d 316; Weinhandler v. Eastern
Brewing Co., 1905, 46 Misc. 584, 92 N.Y.S. 792; State v. Ortego, 1945, 22
Wash. 2d 552, 157 P.2d 320, 159 A.L.R. 1232.

[3] Cooper v. Hoeglund, 1946, 221 Minn. 446, 22 N.W.2d 450; McColgan v.
Noble, Mo.App., St. Louis, 1930, 29 S.W.2d 205; Brice v. Miller, 1892, 35 S.C.
537, 15 S.E. 272; Pressley v. State, 1921, 18 Ala.App. 40, 88 So. 291. See
cases collected at 15 A.L.R. 544 (1921); 122 A.L.R. 436 (1939); 159 A.L.R.
1250 (1945).

[4] Wuerth v. Frohlich, 1930, 251 Mich. 701, 232 N.W. 373; Carroll v. Gimbel
Bros., 1st Dept. 1921, 195 App.Div. 444, 186 N.Y.S. 737; Pecoraro v.
Pecoraro, 1932, 105 Pa.Super. 543, 161 A. 591.

[5] Read United States v. Provident Trust Co., 1934, 291 U.S. 272, 54 S. Ct.
389, 78 L. Ed. 793.

[6] See 4 Wigmore, Evidence, § 1173 et seq. (3d ed. 1940), and the many
cases there cited.

[7] 4 Wigmore, Evidence, § 1330 (3d Ed. 1940), quoting McIver, C. J., in Brice
v. Miller, 1892, 35 S.C. 537, 549, 15 S.E. 272.

[8] Wilmoth v. Wheaton, 81 Kan. 29, 105 P. 39.

[9] Ruch v. Rock Island, 97 U.S. 693, 24 L. Ed. 1101.

[10] See discussion and cases at 15 A.L.R. 548 et seq. (1921) and at 79 A.L.R.
1410 et seq. (1932).

Page 41
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RULE 130 OBJECT EVIDENCE
105 Phil. 1242
G.R. No. L-14257, July 31, 1959
THE PEOPLE OF THE PHILIPPINES, PETITIONER 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.
DECISION
LABRADOR, J.:
In Criminal Case No. 36885 of the Court of First Instance of Manila,
respondents Pacita Madrigal-Gonzales and others are charged with the
crime of falsification of 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 Gonzalez 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 blue
invoices numbered 101301 to 101400 of the Metro Drug Corporation,
Magallanes corner Jakosalem, Cebu City. The booklet contained the
triplicate copies, and according to said witness the original invoices were
PINEDAPCGRNMAN
sent to the 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 triplicate, so
that the duplicates and the triplicates were filled out by 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 the 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 and
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-l" 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
Page 42
back to the identification of the triplicate invoice, Exh. "D-1", already above
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RULE 130 OBJECT EVIDENCE
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 be
adversely affected by said ruling. In other words, 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 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 be introduced as such, even
without accounting for the non-production of the, originals.
The decision of the question is far from difficult. The admissibility 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 facsimile 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.)
It has also been decided in favor of the petitioner by Us in the case of
People vs. Quinones, 44 Off. Gaz., No. 5, 1520, 1525, thus:
PINEDAPCGRNMAN
"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 8, 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, 349 111. 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 between sheets of writing paper and writing on the
exposed surface at the same time, all are duplicate originals, and any one of
them may be 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, 335 111. 217, 167 N. E. 1; State vs. Keife, 165 La. 47, 115 So. 363;
Taylorvs. 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. Citing U. S. vs.
Manton, 107 Fed. (2d) 834, Cert, 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.
Page 43
(2d) 138; State vs. Lee, 173 La. 770, 138 So. 662; Newman vs. State 65 Ga.
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
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 costs. So ordered.

Bengzon, Padilla, Montemayor, Bautista Angelo, Concepcion,

Endencia, and Barrera, JJ., concur.

Page 44
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
797 F.2d 1504 Lee Seiler, a graphic artist and creator of science fiction creatures, alleged
copyright infringement by George Lucas and others who created and
55 USLW 2214, 230 U.S.P.Q. 856, 1986 produced the science fiction movie "The Empire Strikes Back." Seiler
Copr.L.Dec. P 25,994, claimed that creatures known as "Imperial Walkers" which appeared in The
21 Fed. R. Evid. Serv. 406 Empire Strikes Back infringed Seiler's copyright on his own creatures called
Lee M. SEILER, Plaintiff-Appellant, "Garthian Striders." The Empire Strikes Back appeared in 1980; Seiler did
v. not obtain his copyright until 1981.
LUCASFILM, LTD., Industrial Light and Magic, Twentieth 2
Century-Fox Film Corporation, George Lucas, Jr.,
and Joseph E. Johnston, Defendants-Appellees. Because Seiler wished to show blown-up comparisons of his creatures and
Lucas' Imperial Walkers to the jury at opening statement, the district judge
No. 85-1955. held a pre-trial evidentiary hearing. At the hearing, Seiler could produce no
United States Court of Appeals, originals of his Garthian Striders nor any documentary evidence that they
Ninth Circuit. existed before The Empire Strikes Back appeared in 1980. The district judge,
applying the best evidence rule, found that Seiler had lost or destroyed the
Argued and Submitted April 17, 1986. originals in bad faith under Fed.R.Evid. 1004(1) and denied admissibility of
Decided Aug. 26, 1986. any secondary evidence, even the copies that Seiler had deposited with the
Copyright Office. With no admissible evidence, Seiler then lost at summary
Elliot L. Bien, Bronson, Bronson & McKinnon, San Francisco, Cal., for
judgment, 613 F.Supp. 1253.
plaintiff-appellant.
FACTS
Joel Boxer, Nutter, Bird, Marella, Boxer, Wolpert & Matz, Los Angeles, Cal.,
John Keker, Robert Van Nest, Keker & Brockett, San Francisco, Cal., for 3
defendants-appellees.
Seiler contends that he created and published in 1976 and 1977 science
Appeal from the United States District Court for the Northern District of fiction creatures called Garthian Striders. In 1980, George Lucas released
California. The Empire Strikes Back, a motion picture that contains a battle sequence
depicting giant machines called Imperial Walkers. In 1981 Seiler obtained a
Before FARRIS, and BOOCHEVER, Circuit Judges, and KEEP,* District Judge.
copyright on his Striders, depositing with the Copyright Office
FARRIS, Circuit Judge: "reconstructions" of the originals as they had appeared in 1976 and 1977.

Page 45
1 4

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RULE 130 OBJECT EVIDENCE
Seiler contends that Lucas' Walkers were copied from Seiler's Striders which
were allegedly published in 1976 and 1977. Lucas responds that Seiler did
not obtain his copyright until one year after the release of The Empire
Strikes Back and that Seiler can produce no documents that antedate The
Empire Strikes Back.
5 1. Application of the best evidence rule.
Because Seiler proposed to exhibit his Striders in a blow-up comparison to
Lucas' Walkers at opening statement, the district judge held an evidentiary
hearing on the admissibility of the "reconstructions" of Seiler's Striders.
Applying the "best evidence rule," Fed.R.Evid. 1001-1008, the district court
found at the end of a seven-day hearing that Seiler lost or destroyed the
originals in bad faith under Rule 1004(1) and that consequently no
secondary evidence, such as the post-Empire Strikes Back reconstructions,
was admissible. In its opinion the court found specifically that Seiler testified
falsely, purposefully destroyed or withheld in bad faith the originals, and
fabricated and misrepresented the nature of his reconstructions. The
district court granted summary judgment to Lucas after the evidentiary
hearing.
6
On appeal, Seiler contends 1) that the best evidence rule does not apply to
his works, 2) that if the best evidence rule does apply, Rule 1008 requires a
jury determination of the existence and authenticity of his originals, and 3)
that 17 U.S.C. Sec. 410(c) of the copyright laws overrides the Federal Rules
of Evidence and mandates admission of his secondary evidence.
7
The appeal was timely; this court has jurisdiction under 28 U.S.C. Sec. 1291.
Review of summary judgment is de novo. Ashton v. Cory, 780 F.2d 816, 818
(9th Cir.1986). The issues presented are questions of law, reviewable de
PINEDAPCGRNMAN
novo. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.1984)
(en banc).
DISCUSSION
8
9
The best evidence rule embodied in Rules 1001-1008 represented a
codification of longstanding common law doctrine. Dating back to 1700, the
rule requires not, as its common name implies, the best evidence in every
case but rather the production of an original document instead of a copy.
Many commentators refer to the rule not as the best evidence rule but as
the original document rule.
10
Rule 1002 states: "To prove the content of a writing, recording, or
photograph, the original writing, recording, or photograph is required,
except as otherwise provided in these rules or by Act of Congress." Writings
and recordings are defined in Rule 1001 as "letters, words, or numbers, or
their equivalent, set down by handwriting, typewriting, printing,
photostating, photographing, magnetic impulse, mechanical or electronic
recording, or other form of data compilation."
11
The Advisory Committee Note supplies the following gloss:
12
Page 46
Traditionally the rule requiring the original centered upon accumulations of
data and expressions affecting legal relations set forth in words and figures.
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RULE 130 OBJECT EVIDENCE
This meant that the rule was one essentially related to writings. Present day
techniques have expanded methods of storing data, yet the essential form
which the information ultimately assumes for usable purposes is words and
figures. Hence the considerations underlying the rule dictate its expansion
to include computers, photographic systems, and other modern
developments.
13
Some treatises, whose approach seems more historical than rigorously
analytic, opine without support from any cases that the rule is limited to
words and figures. 5 Weinstein's Evidence (1983), p 1001(1) at 1001-11; 5
Louisell & Mueller, Sec. 550 at 285.
14
We hold that Seiler's drawings were "writings" within the meaning of Rule
1001(1); they consist not of "letters, words, or numbers" but of "their
equivalent." To hold otherwise would frustrate the policies underlying the
rule and introduce undesirable inconsistencies into the application of the
rule.
15
In the days before liberal rules of discovery and modern techniques of
electronic copying, the rule guarded against incomplete or fraudulent proof.
By requiring the possessor of the original to produce it, the rule prevented
the introduction of altered copies and the withholding of originals. The
purpose of the rule was thus long thought to be one of fraud prevention,
but Wigmore pointed out that the rule operated even in cases where fraud
was not at issue, such as where secondary evidence is not admitted even
though its proponent acts in utmost good faith. Wigmore also noted that if
prevention of fraud were the foundation of the rule, it should apply to
PINEDAPCGRNMAN
objects as well as writings, which it does not. 4 Wigmore, Evidence Sec.
1180 (Chadbourn rev. 1972).
16
The modern justification for the rule has expanded from prevention of fraud
to a recognition that writings occupy a central position in the law. When the
contents of a writing are at issue, oral testimony as to the terms of the
writing is subject to a greater risk of error than oral testimony as to events
or other situations. The human memory is not often capable of reciting the
precise terms of a writing, and when the terms are in dispute only the
writing itself, or a true copy, provides reliable evidence. To summarize then,
we observe that 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
duplication are the concerns addressed by the best evidence rule. See 5
Louisell & Mueller, Federal Evidence, Sec. 550 at 283; McCormick on
Evidence (3d ed. 1984) Sec. 231 at 704; Cleary & Strong, The Best Evidence
Rule: An Evaluation in Context, 51 Iowa L.Rev. 825, 828 (1966).
17
Viewing the dispute in the context of the concerns underlying the best
evidence rule, we conclude that the rule applies. McCormick summarizes
the rule as follows:
18
[I]n proving the terms of a writing, where the terms are material, the
original writing must be produced unless it is shown to be unavailable for
some reason other than the serious fault of the proponent.
19
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RULE 130 OBJECT EVIDENCE
McCormick on Evidence Sec. 230, at 704.
20
The contents of Seiler's work are at issue. There can be no proof of
"substantial similarity" and thus of copyright infringement unless Seiler's
works are juxtaposed with Lucas' and their contents compared. Since the
contents are material and must be proved, Seiler must either produce the
original or show that it is unavailable through no fault of his own. Rule
1004(1). This he could not do.
21
The facts of this case implicate the very concerns that justify the best
evidence rule. Seiler alleges infringement by The Empire Strikes Back, but he
can produce no documentary evidence of any originals existing before the
release of the movie. His secondary evidence does not consist of true copies
or exact duplicates but of "reconstructions" made after The Empire Strikes
Back. In short, Seiler claims that the movie infringed his originals, yet he has
no proof of those originals.
22
The dangers of fraud in this situation are clear. The rule would ensure that
proof of the infringement claim consists of the works alleged to be
infringed. Otherwise, "reconstructions" which might have no resemblance
to the purported original would suffice as proof for infringement of the
original. Furthermore, application of the rule here defers to the rule's
special concern for the contents of writings. Seiler's claim depends on the
content of the originals, and the rule would exclude reconstituted proof of
the originals' content. Under the circumstances here, no "reconstruction"
can substitute for the original.
23
PINEDAPCGRNMAN
Seiler argues that the best evidence rule does not apply to his work, in that
it is artwork rather than "writings, recordings, or photographs." He contends
that the rule both historically and currently embraces only words or
numbers. Neither party has cited us to cases which discuss the applicability
of the rule to drawings.1
24
To recognize Seiler's works as writings does not, as Seiler argues, run
counter to the rule's preoccupation with the centrality of the written word
in the world of legal relations. Just as a contract objectively manifests the
subjective intent of the makers, so Seiler's drawings are objective
manifestations of the creative mind. The copyright laws give legal protection
to the objective manifestations of an artist's ideas, just as the law of
contract protects through its multifarious principles the meeting of minds
evidenced in the contract. Comparing Seiler's drawings with Lucas' drawings
is no different in principle than evaluating a contract and the intent behind
it. Seiler's "reconstructions" are "writings" that affect legal relations; their
copyrightability attests to that.
25
A creative literary work, which is artwork, and a photograph whose contents
are sought to be proved, as in copyright, defamation, or invasion of privacy,
are both covered by the best evidence rule. See McCormick, Sec. 232 at 706
n. 9; Advisory Committee's Note to Rule 1002; 5 Louisell & Mueller, Sec. 550
at 285 n. 27. We would be inconsistent to apply the rule to artwork which is
literary or photographic but not to artwork of other forms. Furthermore,
blueprints, engineering drawings, architectural designs may all lack words or
numbers yet still be capable of copyright and susceptible to fraudulent
alteration. In short, Seiler's argument would have us restrict the definitions
of Rule 1001(1) to "words" and "numbers" but ignore "or their equivalent."
Page 48
We will not do so in the circumstances of this case.
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RULE 130 OBJECT EVIDENCE
26
Our holding is also supported by the policy served by the best evidence rule
in protecting against faulty memory. Seiler's reconstructions were made
four to seven years after the alleged originals; his memory as to
specifications and dimensions may have dimmed significantly. Furthermore,
reconstructions made after the release of the Empire Strikes Back may be
tainted, even if unintentionally, by exposure to the movie. Our holding
guards against these problems.
27
2. Rule 1008.
28
As we hold that the district court correctly concluded that the best evidence
rule applies to Seiler's drawings, Seiler was required to produce his original
drawings unless excused by the exceptions set forth in Rule 1004. The
pertinent subsection is 1004(1), which provides:
29
The original is not required, and other evidence of the contents of a writing,
recording, or photograph is admissible if--
30
(1) Originals lost or destroyed. All originals are lost or have been destroyed,
unless the proponent lost or destroyed them in bad faith;
31
In the instant case, prior to opening statement, Seiler indicated he planned
to show to the jury reconstructions of his "Garthian Striders" during the
opening statement. The trial judge would not allow items to be shown to
PINEDAPCGRNMAN
the jury until they were admitted in evidence. Seiler's counsel reiterated
that he needed to show the reconstructions to the jury during his opening
statement. Hence, the court excused the jury and held a seven-day hearing
on their admissibility. At the conclusion of the hearing, the trial judge found
that the reconstructions were inadmissible under the best evidence rule as
the originals were lost or destroyed in bad faith. This finding is amply
supported by the record.
32
Seiler argues on appeal that regardless of Rule 1004(1), Rule 1008 requires a
trial because a key issue would be whether the reconstructions correctly
reflect the content of the originals. Rule 1008 provides:
33
When the admissibility of other evidence of contents of writings, recordings,
or photographs under these rules depends upon the fulfillment of a
condition of fact, the question whether the condition has been fulfilled is
ordinarily for the court to determine in accordance with the provisions of
rule 104. However, when an issue is raised (a) whether the asserted writing
ever existed, or (b) whether another writing, recording, or photograph
produced at the trial is the original, or (c) whether other evidence of
contents correctly reflects the contents, the issue is for the trier of fact to
determine as in the case of other issues of fact.2
34
Seiler's position confuses admissibility of the reconstructions with the
weight, if any, the trier of fact should give them, after the judge has ruled
that they are admissible. Rule 1008 states, in essence, that when the
admissibility of evidence other than the original depends upon the
Page 49
fulfillment of a condition of fact, the trial judge generally makes the
determination of that condition of fact. The notes of the Advisory
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RULE 130 OBJECT EVIDENCE
Committee are consistent with this interpretation in stating: "Most
preliminary questions of fact in connection with applying the rule preferring
the original as evidence of contents are for the judge ... [t]hus the question
of ... fulfillment of other conditions specified in Rule 1004 ... is for the
judge." In the instant case, the condition of fact which Seiler needed to
prove was that the originals were not lost or destroyed in bad faith. Had he
been able to prove this, his reconstructions would have been admissible and
then their accuracy would have been a question for the jury. In sum, since
admissibility of the reconstructions was dependent upon a finding that the
originals were not lost or destroyed in bad faith, the trial judge properly
held the hearing to determine their admissibility.
35
3. Does 17 U.S.C. Sec. 410(c) require the admissibility of the copies of
Seiler's work deposited at the Copyright Office?
36
Since Seiler's drawings are within the best evidence rule, we must address
the question whether Sec. 410(c) of the Copyright Act mandates their
admission in evidence. Section 410(c) states:
37
In any judicial proceedings the certificate of a registration made before or
within five years after first publication of the work shall constitute prima
facie evidence of the validity of the copyright and of the facts stated in the
certificate. The evidentiary weight to be accorded the certificate of a
registration made thereafter shall be within the discretion of the court.
38
PINEDAPCGRNMAN
Lucas and the district court opinion rely on cases which construe this section
as raising a rebuttable presumption of a valid copyright.3 See Durham
Industries, Inc. v. Tomy Corp., 630 F.2d 905, 908 (2d Cir.1980). What Lucas
and the district court ignore, however, is the previous threshold question of
the admissibility of the certificate. They are correct that, once admitted, the
certificate and its presumptive validity may be rebutted and defeated, even
at a summary judgment. Carol Barnhart, Inc. v. Economy Cover Corp., 594
F.Supp. 364 (E.D.N.Y.1984), reh'g. denied, 603 F.Supp. 432 (1985), aff'd., 773
F.2d 411 (2d Cir.1985).
39
There is no support, however, for denying outright the admission of the
certificate. While neither the cases nor Nimmer address the point, the
language of Sec. 410(c) requires automatic admission of the certificate. This
conclusion is strengthened by reference to the language of Sec. 410(c)'s
predecessor, Sec. 209 of the 1909 Act, which provided that the registration
certificate "shall be admitted in any court as prima facie evidence of the
facts stated therein." 3 Nimmer on Copyright, Sec. 12.11 at 12-77 n. 2.
40
Even though the certificate itself is admissible under Sec. 410(c), the statute
is unclear as to the admissibility of the copies deposited with the Copyright
Office. Congress may have intended to mandate admissibility only of the
certificate, or it may have deemed the deposited copies to be incorporated
into the certificate and therefore admissible as well. The legislative history
does not clarify Congress' intentions. See H.R.Rep. No. 1476, 94th Cong., 2d
Sess. 156-57, reprinted in 1976 U.S.Code Cong. & Ad.News 5659, 5772-73.
No case has addressed this issue, and Nimmer equivocates. 3 Nimmer on
Copyright, Sec. 12.11 at 12-78 n. 20.
Page 50
41
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
We hold that when the deposited copies are subject to evidentiary
challenge under the best evidence rule, the copies are not deemed to be
incorporated into the certificate and are not therefore automatically
admissible under Sec. 410(c). This holding allows admissibility of the
certificate, so that a party may present presumptive evidence of the validity
of the copyright. But the deposited copies, when challenged as not the
original documents or true copies, will not share this admissibility or
presumption. We limit this holding to situations involving the best evidence
rule, and leave for another case the decision as to whether, under other
circumstances, the deposited copies may be incorporated in the certificate.

42

AFFIRMED.

Page 51
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RULE 130 OBJECT EVIDENCE
17 Phil. 522
G.R. No. 5791, December 17, 1910
THE UNITED STATES,, PLAINTIFF AND APPELLEE, VS. BERNARDO GREGORIO
AND EUSTAQUIO BALISTOY, DEFENDANTS AND APPELLANTS.
DECISION
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 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
PINEDAPCGRNMAN
the judgment debtor, Balistoy, in 1905, prior to the filing of the
complaint. By reason of this claim and petition the judgment 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 attached for the sum of P300,
and both were adjudicated to the judgment creditor, according to the
certificate, Exhibit C.
In order that the claim of intervention presented to the sheriff might
prosper, Bernardo Gregorio attached thereto the document 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
Page 52
appealed from, written in duplicate, whereby Balistoy was sentenced to the
penalty of one year eight months and twenty-one days of presidio
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RULE 130 OBJECT EVIDENCE
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.
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 the 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 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
a mere copy of a private document whose legality has not been proven.
PINEDAPCGRNMAN
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 documents and
proceedings such as are recorded in notarial 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.
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
Page 53
testimony of the witnesses who were examined in the two consolidated
causes, there is reason to entertain much doubt as to the
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RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
defendants' innocence, yet, withal, this case does not furnish decisive
and conclusive proof of their respective guilt as co-principals 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 berth 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
oftcio. So ordered.

Arellano, C. J., Mapa, Johnson, Carson, and Moreland, JJ., concur.

Page 54
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RULE 130 OBJECT EVIDENCE
SECOND DIVISION
G.R. No. L-28999, May 24, 1977
COMPAÑIA MARITIMA, PLAINTIFF-APPELLEE, VS. ALLIED FREE WORKERS
UNION, SALVADOR T. LLUCH, MARIANO LL. BADELLES, INDIVIDUALLY AND
IN THEIR CAPACITIES AS PRESIDENT AND VICE-PRESIDENT, RESPECTIVELY
OF THE ALLIED FREE WORKERS UNION, NICANOR HALIBAS AND
LAURENTINO LL. BADELLES, INDIVIDUALLY AND OFFICERS OF ALLIED FREE
WORKERS UNION, DEFENDANTS-APPELLANTS.
DECISION
AQUINO, J.:
Antecedents. - Since the onset in 1954 of litigation between the parties
herein, this is the fifth case between them that has been elevated to this
Court. The incidents preceding the instant appeal are as follows:
On August 11, 1952 the Compañia Maritima and the Allied Free Workers
Union entered into a written contract whereby the union agreed to
perform arrastreand stevedoring work for the company's vessels
at Iligan City. The contract was to be effective for one month counted
from August 12, 1952.
It was stipulated that the company could revoke the contract before the
expiration of the term if the union failed to render proper service. The
contract could be renewed by agreement of the parties (Exh. J).
At the time the contract was entered into, the union had just been
organized. Its primordial desire was to find work for its members. The
union agreed to the stipulation that the company would not be liable for the
payment of the services of the union "for the loading, unloading and
deliveries of cargoes" and that the compensation for such services would be
PINEDAPCGRNMAN
paid "by the owners and consignees 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 services. Arrastre, a Spanish word which refers to hauling of
cargo, comprehends the handling of cargo on the wharf or between the
establishment of the consignee or shipper and the ship's tackle. The service
is usually performed by longshoremen.
On the other hand, stevedoring refers to the handling of the cargo in the
holds of the vessel or between the ship's tackle and the holds of the vessel.
The shippers and consignees paid the union only for
the arrastre work. They refused to pay for the stevedoring service. They
claimed that the shipowner was the one obligated to pay for the
stevedoring service because the bill of lading provided that the unloading of
the cargo was at the shipowner's expense (Exh. 1).
On the other hand, the company refused to pay for the stevedoring service
because the contract (Exh. J) explicitly provided that the compensation for
both arrastre and stevedoring work should be paid by the shippers and
consignees, as was the alleged practice in Iligan City, and that
the shipowner would not be liable for the payment of such services.
Thus, the issue of whether the company should pay for the stevedoring
service became a sore point of contention between the parties. The union
members labored under the impression that they were not being
compensated for their stevedoring service as distinguished
from arrastre service.
Page 55
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RULE 130 OBJECT EVIDENCE
Although the arrastre and stevedoring contract (Exh. J) was
disadvantageous to the union, it did not terminate the contract because its
members were in dire need of work and work, which was not adequately
compensated, was preferable to having no work at all (204, 214-5, 226-
7 tsn May 20, 1960).
Upon the expiration of the one-month period, the said contract was verbally
renewed. The company allowed the union to continue
performing arrastre and stevedoring work.
On July 23, 1954 the union sent a letter to the company requesting that it
be recognized as the exclusive bargaining unit to load and unload the cargo
of its vessels at Iligan City. The company ignored that demand. So, the
union filed on August 6, 1954 in the Court of Industrial Relations (CIR) a
petition praying that it be certified as the sole collective bargaining unit.
Despite that certification case, the company on August 24, 1954 served a
written notice on the union that, in accordance with paragraph 4 of the
1952 contract, the same would be terminated on August 31, 1954. Because
of that notice, the union on August 26, 1954 filed in the CIR charges of
unfair labor practice against the company.
On August 31, 1954 the company entered into a new stevedoring
and arrastre contract with the Iligan Stevedoring Association. On the
following day, September 1, the union members picketed the wharf and
prevented the Iligan Stevedoring Association from performing arrastre and
stevedoring work. The picket lasted for nine days.
On September 8, 1954 the company sued the union and its officers in the
Court of First Instance of Lanao for the rescission of the aforementioned
1952 contract, to enjoin the union from interfering with the loading and
unloading of the cargo, and for the recovery of damages.
PINEDAPCGRNMAN
On the following day, September 9, the lower court issued ex parte a writ of
preliminary injunction after the company had posted a bond in the sum of
P20,000. A few hours later on that same day the union was allowed to file
a counterbond. The injunction was lifted. The union members resumed
their arrastre and stevedoring work.
Later, the union assailed in a prohibition action in this Court the jurisdiction
of the trial court to entertain the action for damages and injunction.
A majority of this Court held that the lower court had jurisdiction to issue
the injunction and to take cognizance of the damage suit filed by the
company but that the injunction was void because it was
issued ex parte and the procedure laid down in section 9(d) of Republic Act
No. 875 was not followed by the trial court (Allied Free Workers Union vs.
Judge Apostol, 102 Phil. 292, 298).
After trial, the lower court rendered a decision dated December 5, 1960,
amended on January 11, 1961, (1) declaring the arrastre and stevedoring
contract terminated on August 31, 1954; (2) dismissing the
union's counterclaim; (3) ordering the union and its officers to
pay solidarily to the company P520,000 as damages with six percent
interest per annum from September 9, 1954, when the complaint was filed;
(4) permanently enjoining the union from performing any arrastre and
stevedoring work for the company at Iligan City, and (5) requiring the union
to post a supersedeas bond in the sum of P520,000 to stay execution.
The union filed a motion for reconsideration. On the other hand, the
company filed a motion for the execution pending appeal of the money
judgment. It filed another motion for the immediate issuance of a writ of
injunction. That second motion was filed in the municipal court
of lligan City in view of the absence of the District Judge.
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RULE 130 OBJECT EVIDENCE
The municipal court issued the writ of injunction. However, this Court set it
aside because it was not an interlocutory order and no special reasons were
adduced to justify its issuance (Allied Free Workers Union vs.
Judge Estipona, 113 Phil. 748).
The union on January 6, 1961 had perfected an appeal from the lower
court's original decision. It did not appeal from
the amended decision. On March 24, 1962 the lower court issued an order
declaring its amended decision final and executory in view of the union's
failure to appeal therefrom. The court directed the clerk of court to issue a
writ of execution. That order was assailed by the union in a certiorari action
filed in this Court. A preliminary injunction was issued by this Court to
restrain the execution of the judgment.
On May 16, 1962 this Court dissolved the injunction at the instance of the
company which had filed a counterbond. Thereupon, the 225 members of
the union yielded their ten-year old jobs to the new set of workers
contracted by the company.
The certiorari incident was decided on June 30, 1966. This Court noted that
the lower court amended its decision for the purpose of correcting certain
errors and omissions which were not substantial in character and that its
amended decision was served upon the parties after the union had
perfected its appeal from the original decision.
Under those circumstances, this Court held that the union's appeal should
be given due course, subject to the amendment of its record on
appeal. This Court reserved to the members of the union the right to secure
restitution under sections 2 and 5, Rule 39 of the Rules of Court (Allied Free
Workers Union vs. Estipona, L-19651, June 30, 1966, 17 SCRA 513, 64 O.G.
2701).
PINEDAPCGRNMAN
Pursuant to that reservation, the union on December 16, 1966 filed a
motion for restitution, praying that its 225 members be restored to their
jobs and that the company be ordered to pay P1,620,000 as damages
consisting of the lost earnings during the four-year period from May 8,
1962 to May 8, 1966.
On the other hand, the company in its motion of January 18,
1967 reiterated its 1960 motion for the execution of the lower court's
judgment as to the damages of P520,000 and the permanent injunction.
Later, the company called the lower court's attention to this Court's
decision dated January 31, 1967. In that decision, this Court affirmed
the CIR’s decision holding that the company did not commit any unfair labor
practice and reversed the CIR's directive that a certification election be held
to determine whether the union should be the exclusive bargaining
unit. This Court held that the union could not act as a collective bargaining
unit because the union was an independent contractor and its members
were not employees of the company (Allied Free Workers Union
vs. Compañia Maritima, L-22951-2 and L-22971, 19 SCRA 258).
The lower court in its order of April 25, 1967 (1) denied the union's motion
for restitution and to stay execution of its amended decision on January 11,
1961 and (2) required the union to file a supersedeas bond in the sum of
P100,000 within thirty days from notice. The bond was reduced to P50,000
in the lower court's order of August 16, 1967. The union posted the bond
on August 24, 1967.
The lower court approved the union's amended record on appeal in its
order of October 6, 1967.
The union appealed directly to this Court because the amount involved
exceeds P200,000. The appeal was perfected before Republic Act No. 5440
Page 57
took effect on September 9, 1968.
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RULE 130 OBJECT EVIDENCE
Other proceedings. - The company in its original complaint prayed that the
union and its officials be ordered to pay actual damages amounting to
P15,000 for the union's failure to load and unload cargo in and from the
company's 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 fees (10-12, Record on Appeal).
On September 15, 1954 the company added a fourth cause of action to its
complaint. It alleged that by reason of the acts of harassment and
obstruction perpetrated by the union in the loading and unloading of cargo
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,
1954wherein it was indicated that the company lost freight revenues
amounting to P178,579.20 during the period from January 1 to September
7, 1954 (121-143, Record on Appeal).
On November 27, 1954 the company filed another motion for the
restoration of the injunction. In support of that motion, the company
attached a trip operation report showing the unloaded cargoes on the
company's 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 of action to 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
PINEDAPCGRNMAN
estimated amount of P20,000 for overhead expenses for the delay in the
departure of its vessels attributable to the union's unsatisfactory
stevedoring and arrastre work (225-229, 237-8, Record on Appeal).
Also on March 5, 1955 the union answered the original and supplemental
complaints. It denied that its members had rendered inefficient service. It
averred that the termination of the contract was prompted by the
company's desire to give the work to the Iligan Stevedoring Association
which the company had allegedly organized and subsidized. The union filed
a counterclaim for P200,000 as compensation for its services to the
company and P500,000 as other damages (239-252, Record on Appeal).
On March 9, 1960 the company filed a third supplemental complaint. It
alleged that the continuation of the stevedoring and arrastre work by the
union for the company from 1955 to date had caused losses to the company
at the rate of P25,000 annually in the form of lost freight on shutout cargoes
and the expenses for the equipment used to assist the union members in
performing their work (320-3, Record on Appeal).
Plaintiff company's evidence. - Jose C. Teves, the company's branch
manager at Iligan City, testified that on August 24, 1954 he terminated
the arrastre and stevedoring contract with the union (Exh. J) upon
instruction of the head office. The contract was terminated in order to
avoid further losses to the company caused by the union's inefficient service
(85-86 tsn March 11, 1960).
After the termination of the contract, the members of the union allegedly
harassed the company with the help of goons. The cargoes could not be
unloaded in spite of the fact that the company had sought the protection of
the law-enforcing authorities (88). The company's last recourse was to go
to court (89).
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RULE 130 OBJECT EVIDENCE
The company supposedly suffered losses as a result of the union's inefficient
service since September 1, 1954 (91). Teves hired auditors to ascertain the
losses suffered by the company during the period from January 1
to September 11, 1954.
The trial court awarded actual damages amounting to P450,000 on the basis
of the auditors' reports, Exhibits A to I. It did not carefully examine the said
exhibits. Contrary to the trial court's impression, Exhibits B, C and D are not
auditors' reports.
The trial court did not bother to make a breakdown of the alleged
damages totalling P450,000. The reports of the two hired
accountants, Demetrio S. Jayme and M.J. Siojo, show the following alleged
damages in the aggregate amount of P349,245.37 (not P412,663.17, as
erroneously added by the company's counsel, 161, 163-4 tsn March 11,
1960):
TABULATION OF ALLEGED DAMAGES CLAIMED BY COMPAÑIA MARITIMA
(1) Freight for 74,751 bags of fertilizer allegedly booked for shipment in
the company's vessels but loaded in other vessels during the period from
Jan. 1 to August 31, 1954, Statement A in Exh. A, CPA Jayme's report - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - P29,900.40
(2) Lost freight on other shutout cargoes for January 1 to August 31, 1954,
Statement A in Exh. A, report of CPA Jayme - - - - - - - 4,339.64
(3) Lost freight on shutout cargoes for September 2 to 7, 1954 booked for
shipment in M. V. Mindoro, Panay and Masthead Knot, Statement B in Exh.
A, CPA Jayme's report - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - 6,167.16
(4) Losses sustained in voyages of M. V. Panay and Mindoro in four
voyages from September 4 to 11, 1954, with estimates, Statement B, Exh. A
PINEDAPCGRNMAN
----------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,764.50
(5) Other estimated losses for the said voyages of M.
V. Panay and Mindoro for the same period, based on interviews of parties at
the wharf, Statement B, Exh. A - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10,000.00
(6) Additional subsistence expenses for the M. V. Mindoro and Panay due
to the delays in their departure from January 1 to August 31, 1954 as
certified by the pursers of the two vessels, Statement C., Exh. A - - - - - - - - - -
---------------------------------- 4,407.50
(7) Estimated loss in freight and passenger revenue for the period from
January 1 to August 31, 1954, based on 1953 freight revenue for the same
period Statement D Exh. A - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 100,000.00
(8) Estimated loss in passenger fares for the period from September
to December 31, 1954, Statement D, Exh. A - - - - - - - - - - - - 20,000.00
(9) Lost freight charges from September 12 to December 28, 1954, as
certified by the chief clerk of the company's Iligan office, Exh. B - - - - - - - - - -
----------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 62,680.12
(10) Estimated overhead expenses for delay of vessels in port, Exh. B - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20,000.00
(11) Forklift operating expenses for 1955, consisting of salaries and
maintenance expenses, Exh. E-1 - - - - - - - - - - - - - - - - - - - - - 5,677.54
(12) Lost freight revenue for 1955, Exh. E-2 - - - - - - - - - - - - - - - - - - - - - - - - -
Page 59
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 17,838.78
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RULE 130 OBJECT EVIDENCE
(13) Forklift operating expenses for 1956, Exh. F - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,520.90
(14) Lost freight revenue for 1956, Exh. F-2 - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,849.56
(15) Forklift operating expenses for 1957, Exh. G-1 - - - - - - - - - - - - - - - - - - - -
------------------ ------------------- 8,259.08
(16) Lost freight revenue for 1957, Exh. G-2 - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - 14,538.10
(17) Forklift operating expenses for 1958, Exh. H-1 - - - - - - - - - - - - - - - - - - - -
------------------ ------------------- 7,503.45
(18) Lost freight revenue for 1958, Exh. H-2 - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - 10,193.46
(19) Forklift operating expenses for 1959, Exh. I-1 - - - - - - - - - - - - - - - - - - - -
-------------------------------------- 8,745.35
(20) Lost freight revenue for 1959, Exh. I-2 - - - - - - - - - - - - - - - - - - - - - - - - - -
------------------------------------- 7,859.83
TOTAL P349,245.37
We tabulated the alleged damages to show that the trial court's award to
the company of P450,000 as damages is not supported by the evidence. On
the other hand, the statement of the company's counsel that the
damages totalled P412,663.17 (162-164 tsn March 11, 1960) is wrong.
Teves, the company's branch manager, submitted a statement (Exh. K)
showing the alleged cost of three forklifts, 200 pieces of pallet boards, 530
pieces of wire rope slings and two pieces of tarpaulins in the total sum of
P27,215. In that statement, he claims that the damages to the company by
PINEDAPCGRNMAN
reason of the depreciation of the said items of equipment amounted to
P38,835 or more than the cost thereof.
The company's counsel, in his summary of the damages, ignored the alleged
damages of P38,835 indicated by Teves in Exhibit K. The company's counsel
relied only on the auditors' reports, Exhibits A and E to I and on Exhibit B,
the chief clerk’s statement. As already noted, those documents show that
the total damages claimed by the company amounted to P349,245.37.
The best evidence on the cost of the said equipment would have been the
sales invoices instead of the oral testimony of Teves. He did not produce
the sales invoices.
Teves further testified that Salvador T. Lluch was the president of the
union; Nicanor Halibas, the treasurer; Mariano Badelles, the general
manager, and Laurentino Badelles, a vice-president.
Appellants' statement of facts. - To sustain their appeal, the appellants
made the following exceedingly short and deficient recital of the facts:
"Sometime in the month of August, 1954, defendant, Allied Free Workers
Union filed an unfair labor practice case against defendant (should be
plaintiff) and its branch manager, Mr. Jose Teves, with the Court of
Industrial Relations, Manila, and docketed as Case No. 426-ULP: defendant
union also filed a petition for certification election docketed as Case No.
175-MC against plaintiff; defendant union also filed a notice of strike dated
August 27, 1954; the Secretary of Labor wired the public
defender, Iligan City, on August 27, 1954 (see annexes 1 to 4, motion to
dismiss, Record on Appeal, pp. 54-65).
"To counteract these legitimate moves of labor, plaintiff filed the complaint
docketed as Civil Case No. 577 in the Court of First Instance
Page 60
of Lanao (now Lanao del Norte) for damages and/or resolution of contract
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RULE 130 OBJECT EVIDENCE
with writ of preliminary injunction. On a decision adverse to their interests,
defendants take this appeal.
"On the question of jurisdiction taken before this Honorable Tribunal in G.R.
No. L-8876, it was held:
"'x x x for the instant case merely refers to the recovery of damages
occasioned by the picketing undertaken by the members of the union and
the rescission of the arrastre and stevedoring contract previously entered
into between the parties.'"
The appellants did not discuss their oral and documentary evidence.*
First assignment of error. - The appellants contend that the trial court erred
in awarding to the company actual damages amounting to P450,000, moral
damages of P50,000 and attorney's fees of P20,000, and in holding that the
four officers of the union are solidarily liable for the said damages.
Appellants' counsel assailed the award of actual damages on the ground
that the auditors' reports, on which they were based, were hearsay.
After analyzing the nature of the damages awarded, how the same were
computed, and the trustworthiness of the company's evidence, we find the
first assignment of error meritorious.
We have already stressed that, on the basis of the reports of the two
accountants, the damages claimed by the company, as a matter of simple
addition, does not reach the sum of P450,000 fixed by the trial court. The
damages shown in the accountants' reports and in the statement made by
the company's chief clerk (who did not testify) amount to P349,245.37, or
much less than P450,000.
The company argues that the accountants' reports are admissible in
evidence because of the rule that "when the original consists of numerous
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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
(Sec. 2[e], Rule 130, Rules of Court).
That rule cannot be applied in this case because the voluminous character
of the records, on which the accountants' reports were based, was not duly
established (U. S. vs. Razon and Tayag, 37 Phil. 856, 861; 29 Am Jur 2nd
529).
It is also a requisite for the application of the rule that the records and
accounts should be made accessible to the adverse party so that the
correctness of the summary may be tested on cross-examination (29
Am Jur 2nd 517-8; 32A C.J.S. 111).
What applies to this case is the general rule "that an audit made by, or the
testimony of, a private auditor, is inadmissible in evidence as proof of the
original records, books of accounts, reports or the like" (Anno: 52 ALR
1266).
That general rule cannot be relaxed in this case because the company failed
to make a preliminary showing as to the difficulty or impossibility attending
the production of the records in court and their examination and analysis as
evidence by the court (29 Am Jur 2nd 529).
A close scrutiny of the accountants' reports reveals their lack of probative
value. The propriety of allowing the different items of damages is discussed
below.
Unrealized freight and passenger revenue for 1954 ascertained by
Accountant Demetrio S. Jayme.- In his report (Exh. A, pp. 134 to 147, Record
on Appeal), Jayme used the pronouns "we" and "our" and made reference
Page 61
to the examination made by the "auditors" of his accounting office. He did
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RULE 130 OBJECT EVIDENCE
not disclose the names of other "auditors" who assisted him in making the
examination of the company's records.
He gave the impression that he was an independent accountant hired by the
company to make a "special investigation" of the company's losses for the
period from January 1 to September 7, 1954.
The truth is that Jayme was a "personal friend" of Teves, the company's
branch manager at Iligan City. Teves was the company's principal witness in
this case. He verified the complaint herein. He signed for the company the
stevedoring and arrastre contract which he later rescinded. In
fact, Teves intervened in the drafting of the contract. It was his idea that
the company should not pay the arrastre and stevedoring fees 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 company's 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 company's branch
manager. Obviously, Jayme would be biased for the company. He violated
a rule of the accountants' code of ethics by not disclosing in his report of
examination that he was an employee of the company (84 tsn June 2, 1960).
Accountant Jayme allegedly found from the company's records at lligan City
that its freight and passenger revenue for the eight-month period from
January 1 to August 31, 1953 amounted to P373,333.14 and that for the
same period in 1954, that revenue amounted to P470,716.29, or an
increase of P97,383.12 (Statement D of Exh. A, 145, Record on Appeal).
Jayme interpreted those figures as signifying that the company would have
realized more revenue if the union had rendered better service. He
PINEDAPCGRNMAN
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 company's freight revenue during the first eight
months of 1954 could have amounted to at least P600,000 and that since it
actually realized only P470,716.29, its loss of freight revenue for that period
could be "conservatively" estimated at least P100,000 (item 7 of the
tabulation of damages).
He stated that he attached to his report on the comparative statement of
gross revenue a certificate of the captain of the vessel Panay showing the
delays in its departure in lligan 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 suffered in the operation of the
vessels Mindoro and Panay from September 4 to 11, 1954, consisting of
extra meals, expenses for unloading cargo, estimated loss in passage
revenue for four voyages, and estimated loss from "re-routed freights to
competing vessels" (consisting of rice, corn and bananas), and (c) the sum of
P4,407.50 as alleged additional subsistence incurred for the crew of
the Panay and Mindoro from January 1 to August 31, 1954 (items 4, 5 and 6
of the tabulation of damages). The records of the purser and chief steward
were allegedly examined in ascertaining those damages.
Page 62
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RULE 130 OBJECT EVIDENCE
It would not be proper to allow Jayme's estimates as recoverable
damages. They are not supported by reliable evidence. They can hardly be
sanctioned by the "generally accepted auditing standards" alluded to
in Jayme's report. The pertinent records of the company should have been
produced in court. The purser and steward did not testify.
The rule is that the auditor's summary should not include his
conclusions or inferences (29 Am Jur 2d 519). His opinion is not evidence.
The trial court unreservedly gave credence to the conjectures
of Jayme. Obviously, his inflated guesses are inherently speculative and
devoid of probative value. Furthermore, his estimate of the unrealized
freight revenue for January 1 to August 31, 1954 overlapped with his
computation of the lost freight for the unloaded 74,751 bags of fertilizer
and other cargoes covering the same period (Statement A of Exh. A).
The foregoing discussion shows Jayme's unreliable modus operandi in
ascertaining the 1954 losses which the company claimed to have suffered in
consequence of the union's alleged inefficiency or poor service. It is
noteworthy that those losses were not averred with particularity and
certitude in the company's complaint.
The same observations apply with equal cogency to the damages amounting
to P40,407.20 as lost freight revenue also for the year 1954 (items 1 to 3 of
the tabulation of damages) which were computed by Accountant Jayme.
Those items refer to (1) the sum of P29,900.40 as lost freight revenue on
74,751 bags of fertilizer, already mentioned, which were booked for
shipment in the company's 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 company's vessels but not
loaded therein during the same eight-month period, and (3) P6,167.16 as
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unrealized freight revenue on shutout cargoes not loaded in the company's
vessels during the six-day period from September 2 to 7, 1954.
Jayme allegedly based his computations on the records of the company
which were not produced in court. The union objected to Jayme's report as
inadmissible under the hearsay rule or as not being the best evidence.
Even if the presentation of the records themselves as exhibits should have
been dispensed with, yet the company, 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 presented in evidence as supporting
papers for Jayme's report. No such exhibits were presented.
The flaw or error in relying merely on Jayme's summaries is that, as pointed
out by witness Mariano LL. Badelles, cargoes might be shutout due to
causes other than the supposed inefficiency of the union. He testified that
cargoes were shut out deliberately by the company because they could not
be loaded in one vessel (for example, 50,000 bags of fertilizer), or a shipper
had no allotment, or because the company did not want to load cargoes like
bananas (189-194 tsn May 20, 1960). Jayme's summaries did not take into
account the probability that a part of the cargo booked in the company's
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.
Page 63
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RULE 130 OBJECT EVIDENCE
Our conclusion is that an injustice would be perpetrated if the damages
aggregating P178,579 computed and estimated in the report of Jayme, a
biased witness, should be accepted at their face value.
Damages computed by Salvador M. Magante. - The company also claims as
damages for the period from September 12 to December 28, 1954 lost
freight charges on shutout cargoes in the sum of P62,680.12, and the sum of
P20,000 as "overhead expenses for delay of vessels in port", as set forth
by Salvador M.Magante, the company's chief clerk at Iligan City, in his
statement, Exhibit B (items 9 and 10 of the tabulation of damages).
Magante did not testify on his statement. Instead, accountant Jayme,
substituting for Magante, testified on that statement. Jayme said that he
verified the company's records on which Magante based his
statement. Jayme assured the court that the figures
in Magante's statement were supported by the company's records.
But as to the damages of P20,000, Jayme said that he could not certify as to
their correctness because he had not finished his investigation
(33 tsn March 9, 1955). In spite of that admission, the trial court allowed
that item of damages.
The trial court erred in allowing the damages totalling P82,680.12
because Magante's statement, Exhibit B, is hearsay. Magante should have
been presented as a witness. Jayme was not competent to take his place
since the statement was prepared by Magante, not by Jayme. More
appropriate still, the documents and records on which the statement was
based should have been presented as evidence or at least brought to the
court for examination by the union's counsel and its accountant. The trial
court required the production of the manifests
supporting Magante's statement (85-86 tsn March 9, 1955). Only one such
manifest, Exhibit C, was produced. The nonproduction of the other records
was not explained.
PINEDAPCGRNMAN
Lost freight revenue and operating expenses for the forklifts.- The company
claimed as damages the sum of P87,986.05 (P151,403.85 as erroneously
computed by the company's counsel, 163 tsn March 11, 1960) consisting of
supposed unrealized freight charges for shutout or unloaded cargoes for the
year 1955 to 1959 (Exh. E to I, Items 11 to 20 of the tabulation of damages).
The claim is covered by the company's third supplemental complaint dated
March 9, 1960 wherein it was alleged that due to the acts of the union and
its officers the company had suffered damages of not less than P25,000
annually since 1955 (320-3, Record on Appeal). That supplemental
complaint was hurriedly filed during the trial as directed by the trial court.
The said damages were computed in the reports of Miguel J. Siojo, an
accountant who, for two days and nights, March 8 to 10, 1960, or shortly
before and during the trial, allegedly examined the company's record
at Iligan City, such as its cash book, cash vouchers, reports to the head
office, shipping manifests, and liquidation reports. Those records were not
produced in court. Their nonproduction was not explained. If the
accountant was able to summarize the contents of those records in two
days, they could not have been very voluminous. They should have been
offered in evidence.
The alleged expenses in the operation of the forklifts consisted of (a) the
wages of the operators hired by the company and (b) the cost of gasoline
and oil and expenses for repair.
The company's theory is that under the 1952 contract (Exh. J) the union was
obligated to provide for forklifts in the loading and unloading of
cargo. Inasmuch as the union allegedly did not have forklifts, the company,
to expedite the arrastre and stevedoring work, purchased forklifts, hired
laborers to operate the same, and paid for the maintenance expenses. The
company treated those expenses as losses or damages.
Page 64
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RULE 130 OBJECT EVIDENCE
Those alleged damages amounting to P87,986.05 are in the same category
as the depreciation allowances amounting to P38,835 which the company
claimed for the forklifts, pallet boards, tarpaulins, and wire rope slings that
it purchased for only P27,215. We have stated that the company's counsel
ignored that depreciation in his recapitulation of the damages claimed by
the plaintiff.
The union contends that Siojo's reports (Exh. E to I) were inadmissible
evidence because they were hearsay, meaning that the original documents,
on which the reports were based, were not presented in evidence and,
therefore, appellants' counsel and the court itself were not able to gauge
the correctness of the figures or data contained in the said reports. The
person who had personal knowledge of the operating expenses was not
examined in court.
We are of the opinion that, to avoid fraud or fabrication, the documents
evidencing the alleged expenses should have been presented 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'ssummaries are applicable
to accountant Siojo's reports.
A more substantial ground for rejecting Siojo's reports is that the said
expenses, if really incurred, cannot be properly treated as damages to the
company.
The union's witness, Mariano Ll. Badelles, testified that the company's
forklifts were not used exclusively on the wharf. They were used in the
fertilizer and carbide plants. Sometimes, the union supplied the driver and
the gasoline for the operation of the forklifts (174-177 tsn May 20, 1960).
Moreover, as stated earlier, the company was not paying the union a single
centavo for arrastre and stevedoring work. The shippers and consignees
PINEDAPCGRNMAN
paid for the arrastre service rendered by the union. The union did not
receive any compensation for stevedoring work.
The company complained that the union had been rendering
unsatisfactory arrastre and stevedoring services. That grievance
was controverted by the union.
The use of the forklifts, tarpaulins, pallet boards and wire rope slings
immeasurably benefitted the company. It is not proper nor just that the
company's 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 fees and which impliedly obligated the union to purchase the
said equipment.
If the service rendered by the union members was unsatisfactory, it must be
because the poor stevedores were underfed, and underpaid. They were
underfed and underpaid because the company was astute enough to insure
that it would obtain stevedoring service without paying for it.
If to improve the arrastre and stevedoring service, the company had to incur
expenses for the purchase of forklifts, pallet boards, tarpaulins and wire
rope slings and for the operation of the forklifts, the union should not be
required to reimburse the company for those expenses. The company
should bear those expenses because the same redounded to its benefit.
The trial court erred in ordering the union and its officials to pay the amount
of the said expenses as damages to the company.
Moral damages and attorney's fees. - Considering that the company's claim
for moral damages was based on the same facts on which it predicated its
claim for actual damages, which we have found to be groundless, it follows
Page 65
that the company, a juridical person, is not entitled to moral damages.
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RULE 130 OBJECT EVIDENCE
Anyway, the company did not plead and prove moral damages. It merely
claimed moral damages in the prayer of its complaint. That is not sufficient
(Darang vs. Ty Belizar, L-19487, January 31, 1967, 19 SCRA 214, 222).
Under the facts of this case, we do not find any justification for awarding
attorney's fees to the company. Hence, the trial court's award of P20,000 as
attorney's fees is set aside.
Appellants' first assignment of error, although not properly argued by their
counsel, should be sustained.
Other assignments of error. - The union and its officers contend that the
lower court erred in dismissing their counterclaims. Their counsel did not
even bother to state in their brief the amount of the counterclaims.
The union filed counterclaims for P200,000 as compensation for stevedoring
services from August, 1952 to March 4, 1955; P500,000
as damages, P10,000 as attorney's fees and P5,000 as premium on
the counterbond (251-2, Record on Appeal). In their supplemental
counterclaim, they demanded P500,000 as stevedoring charges for the
period from March 4, 1955 to March 4, 1960 and additional damages of
P10,000 (308-10, Record on Appeal). The trial court dismissed the said
counterclaims.
The appellants in their three-sentence argument in support of their
counterclaims alleged that the company's bill of lading provided that the
unloading of the cargoes was at the company's expense (Exh. 1); that the
company had not paid the sum of P500,000 as compensation for the
stevedoring services rendered by the laborers up to 1960, and that the
stipulation in the arrastre and stevedoring contract,
"that the Compañia Maritima shall not be liable for the payment of the
services rendered by the Allied Free Workers Union for the loading and
deliveries of cargoes as same is payable by the owners and consignees of
PINEDAPCGRNMAN
cargoes, as it has been the practice in the port of Iligan City" (Exh. J, pp. 14,
334, 359, 500, Record on Appeal), was "non-operative" and void, "being
contrary to morals and public policy".
That superficial argument is not well-taken. The printed stipulation
in the bill of lading was superseded by the contractual stipulation. The
contract was prepared by the union officials. As already noted, it was
stipulated in the contract that the stevedoring and arrastre charges should
be paid by the shippers and consignees in consonance with the practice
in Iligan City. That stipulation was binding and enforceable.
The supposed illegality of that stipulation was not squarely raised by the
union and its officials in their answer. They merely averred that the
contract did not express the true agreement of the parties. They did not
sue for reformation of the instrument evidencing the contract. The lower
court did not err in dismissing defendants' counterclaims.
The other two errors assigned by the appellants, namely, that the lower
court erred in issuing a permanent injunction against them and in executing
its decision pending appeal, are devoid of merit.
The appellants invoke section 9(d) of the Magna Carta of Labor regarding
the issuance of injunctions. That section has no application to this case
because it was definitively ruled by this Court in the certification and unfair
labor practice cases that there is no employer-employee relationship
between the company and the stevedores. (They work under
the cabo system).
The lower court did not execute the money aspect of its judgment. It
merely required the defendants to file a supersedeas bond of P50,000.
As to the injunction, it should be recalled that it was this Court which, in its
Page 66
resolution of May 16, 1962 in the execution and appeal incident (L-19651,
17 SCRA 513), allowed the company to terminate the stevedoring
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RULE 130 OBJECT EVIDENCE
and arrastre work of the union and to use another union to perform that
work.
The company had the contractual right to terminate the 1952 contract
(Taylor vs. Uy Tieng Piao, 43 Phil. 873). The lower court did not err in
sustaining the company's rescission of the contract and in enjoining the
union from performing arrastre and stevedoring work.
WHEREFORE, that portion of the trial court's judgment, declaring
the arrastre and stevedoring contract terminated, permanently enjoining
the union and its officials from performing arrastre and stevedoring work
for the vessels of the Compañia Maritima, and dismissing defendants'
counterclaims, is affirmed.
The lower court's award of damages is reversed and set aside. No costs.
SO ORDERED.
Barredo, Antonio, and Martin, JJ., concur.
Fernando, J., concurs in the exhaustive and ably-written opinion of
Justice Aquino, with the observation that the objective of industrial peace
and the ideal of a “compassionate society” so clearly manifest in the present
Constitution call for greater understanding and more sympathetic approach
on the part of management.
Concepcion, Jr., J., no part.
* This case was submitted for decision on July 9, 1970. One reason for the
delay in its disposition is the fact that the briefs are exceedingly brief and do
not give much enlightenment to the Court.
PINEDAPCGRNMAN
The decision under appeal consists of 70 printed pages; the record on
appeal, 883 printed pages; the folder of exhibits, 140 pages, and the
transcripts of the testimonies, 1,101 pages.
The briefs do not conform with the requirements of sections 16 and 17, Rule
46 of the Rules of Court. Their subject indexes do not contain a digest of the
argument (Secs. 16[a] and 17[a], Rule 46).
Appellants' inadequate statement of the case does not contain "a clear and
concise statement of the nature of the action, a summary of the
proceedings, the appealed rulings and orders of the court, the nature of the
judgment and any other matters necessary to an understanding of the
nature of the controversy, with page references to the record." (Sec. 16[c],
Rule 46).
Their statement of facts does not contain "a clear and concise statement in
a narrative form of the facts admitted by both parties and of those in
controversy, together with the substance of the proof relating thereto in
sufficient detail to make it clearly intelligible, with page reference to the
record" (Sec. 16[d], Rule 46).
Under section 1(g), Rule 50 of the Rules of Court, this Court may
dismiss motu proprio the union's appeal for want of page references to the
record in its skimpy statement of facts (Genobiagon vs. Court of Appeals, L-
44323, March 2, 1977).
Page 67
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RULE 130 OBJECT EVIDENCE
G.R. No. L-23893, October 29, 1968
VILLA REY TRANSIT, INC., PLAINTIFF-APPELLANT, VS. EUSEBIO E. FERRER,
PANGASINAN TRANSPORTATION CO., INC., AND PUBLIC SERVICE
COMMISSION, DEFENDANTS, EUSEBIO E. FERRER AND PANGASINAN
TRANSPORTATION CO., INC., DEFENDANTS-APPELLANTS. PANGASINAN
TRANSPORTATION CO., INC., THIRD-PARTY PLAINTIFF-APPELLANT, VS.
JOSE M. VILLARAMA, THIRD-PARTY DEFENDANT-APPELLEE.
DECISION
ANGELES, J.:
This is a tri-party appeal from the decision of the Court of First Instance of
Manila, Civil Case No. 41845, declaring null and void the sheriff's sale
of twocertificates of public convenience in favor
of defendant Eusebio E. Ferrer and the subsequent sale thereof by the
latter to defendant Pangasinan Transportation Co., Inc.; declaring the
plaintiff Villa Rey Transit, Inc., to be the lawful owner of the said certificates
of public convenience; and ordering the private defendants, jointly and
severally, to pay to the plaintiff, 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, pursuant to certificates of
public convenience granted him by the Public Service Commission (PSC, for
short) in Cases Nos. 44213 and 104651, which authorized him to operate a
total of thirty-two (32) units on various routes or lines from Pangasinan to
Manila, and vice-versa. On January 8, 1959, he sold the
aforementioned two certificates of public convenience to
PINEDAPCGRNMAN
the Pangasinan Transportation Company, Inc. (otherwise known
as 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, or on March 6, 1959, a corporation called
Villa Rey Transit, Inc. (which shall be referred to hereafter as the Corpora-
tion) 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 fivecertificates 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
Page 68
application and shall be valid only during the pendency of said
application." Before the PSC could take final action on said application for
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RULE 130 OBJECT EVIDENCE
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 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 autho-
rized 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 two certificates embraced in the contract bet-
ween 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 twocertificates of public convenience (PSC Cases Nos. 59494 and
PINEDAPCGRNMAN
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. Villarana, alleging that Villarama and the Corporation, are one and the
same; that Villaramaand/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,
Page 69
1959 between Pantranco and Villarama is null and void, that the Sheriff's
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RULE 130 OBJECT EVIDENCE
sale of July 16, 1959, is likewise null and void; and the failure to award da-
mages 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 ValentinFernando to the 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
PINEDAPCGRNMAN
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,[4] together 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 know 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
Page 70
did not know it belonged to the incorporators.
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RULE 130 OBJECT EVIDENCE
"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?
x x x x x x x x x x
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 show 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 testi-
monies of Alfonso Sancho[5] and Joaquin Amansec,[6] both employees of said
bank, have proved that the drawer of the check was Jose Villarama himself.
PINEDAPCGRNMAN
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 thestockholders. 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 show 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 purchased[9] and Aristedes Solano, an employee of
the Philippine Bank of Commerce,[10] as 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 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
Page 71
time Pantranco offered the said exhibits, it was the most likely possessor of
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RULE 130 OBJECT EVIDENCE
the originals thereof because they were stolen from the files of the Corpora-
tion 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.[12] As 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
PINEDAPCGRNMAN
expenses and the assets of the Corporation, such as trucks and
equipments;[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 name[22] 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 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
Page 72
stockholders) when they were supposed to have their own money. Even
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
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
PINEDAPCGRNMAN
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 alterego 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 promissor 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 only applies to application for new
lines. The clause in dispute reads thus:
Page 73
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RULE 130 OBJECT EVIDENCE
"(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."
(Underscoring 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 jurisdictions, prior authorization is needed
before anyone can operate a TPU service,[33] whether the service con-
sists 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.)
PINEDAPCGRNMAN
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 seller as a
competitor, and this must be, considering such factors as the good
will[35] 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 doer and maintain with him the business relations enjoyed by the seller.
“x x x 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 matter[37] says:
"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 trade and commerce, With trifling exceptions, said changes
Page 74
have been a continuous development of a general rule. The early cases
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RULE 130 OBJECT EVIDENCE
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." (Underscoring
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 situsor 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
PINEDAPCGRNMAN
ultimate result of the clause or stipulation would be to leave solely
to Pantranco the right to operate along the lines in question, thereby esta-
blishing a 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 super-
vision of the Public Service Commission.[39] This Court had stated long
ago,[40] that "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:
"x x x 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 business go as they did before to swell the
sum of public wealth; the public has the same opportunities of purchasing, if
Page 75
it is a mercantile business; and production is not lessened if it is
a manufacturing plant."
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
The reliance by the lower court on the case of Red Line
Transportation Co. v. Bachrach,[41] 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,[43] the
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 lines subject of the prohibition.
To avoid any misunderstanding, it is here to be emphasized that the 10year
prohibition upon Villarama is not against his application for, or purchase of,
certificates of public convenience, but merely the operation of TPU along
PINEDAPCGRNMAN
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 certifi-
cates 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. x x x 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 Pantrenco 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
Page 76
the contrary, it shall be unlawful for any public service or for the owner,
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE
lessee or operator thereof, without the approval and authorization of
the Commission previously had x x x to sell, alienate, mortgage, encumber
or lease its property, franchise, certificates, privileges, or rights or any part
thereof, x x x," the same section also provides:
"x x x 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.
PINEDAPCGRNMAN
Eusebio Ferrer's charge that by reason of the filing of the action to annul the
sheriff's sale, he had suffered and should be awarded moral, exemplary
damages and attorney's fees, cannot be entertained, in view of the
conclusion herein reached that the sale by Fernando to the Corporation was
valid.
Pantranco, on the other hand, justifies its claim for damages with the
allegation that when it purchased Villarama's business for P350,000.00, it
intended to build up the traffic along the lines covered by the certificates
but it was not 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
Page 77
Villa Rey Transit, Inc. is an entity distinct and separate from the personality
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
[11]
of Jose M. Villarama, and insofar as it awards the sum of P5,000.00 as Francisco, Evidence, 1964 ed. p. 113.
attorney's fees in favor of Villa Rey Transit, Inc.;
[12]
Plaintiff-appellee's Brief, pp. 45-46.
3. The case is remanded to the trial court for the reception of evidence in
[13]
consonance with the above findings as regards the amount of damages TSN, pp. 1568-1569, Session of April 8, 1963.
suffered by Pantranco; and [14]
See the Revised Rules of Court - Evidence by Francisco, 1964 ed., pp.
4. On equitable considerations, without cots. So ordered. 113-114.
[15]
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Ruiz Castro, and Fernando, Sec. 2(a), Rule 130, Rules of Court.
JJ., concur. [16]
It was Celso Rivera who prepared these documents as admitted
Sanchez and Capistrano, JJ., took no part. by Villarama, TSN, pp. 1580-1581, Session of April 8, 1963.
Zaldivar, J., on leave.
[17]
Exh. 6.
[18]
Exhs. 8 to 8-C.

[1] [19]
Application for approval of sale docketed as PSC Case No. 124057. Exhs. 7 to 7-C.

[2] [20]
PSC Case No. 126278. Exhs. 10 to 19, 22; TSN, pp. 1709-1710, Session of April 16, 1963.

[3] [21]
G.R. Nos. L-17684-85, promulgated May 30, 1962. TSN, p. 1625, Session of April 8, 1963.

[4] [22]
TSN, pp. 1649-1651, Session of April 8, 1963. TSN, p. 1646, Session of April 8, 1963.

[5] [23]
TSN, pp. 1210, 1217-1218, Session of Oct. 8, 1962. Brief for Plaintiff-appellee, p. 49.

[6] [24]
TSN, p. 1262, Session of Nov. 8, 1962. TSN, pp. 1593, 1658, Session of April 8, 1963.

[7] [25]
TSN, pp. 947-948, Session of Sept. 3, 1962; TSN, pp. 1022, 1025, 1027- TSN, pp. 1660-1661, ditto.
1029, Session of Sept. 7, 1962. [26]
TSN, pp. 1699-1718, Session of April 16, 1963.
[8]
TSN, pp. 948-949. [27]
TSN, p. 1714, Session of April 16, 1963.
[9]
TSN, pp. 899, 901, Session of Aug. 27, 1962.

Page 78
[28]
TSN, pp. 1627-1628, Session of April 8, 1963.
[10]
TSN, pp. 1227-1228, Session of Oct. 8, 1962.
Intelligentia et Scientia Semper Mea
RULE 130 OBJECT EVIDENCE PINEDAPCGRNMAN
[29] [38]
Borja v. Vasquez, 74 Phil. 56. Clearly, the greater part of said consideration was to
compensate Villarama for not competing with Pantranco for at least 10
[30]
Koppel Phil. v. Yatco, 77 Phil. 496; Lidell & Co. v. Collector, G.R. No. L- years, within which period the latter would put up 31 other units
9687, June 30, 1961; Commissioner v. Norton & Narrison, G.R. No. L- (certificates contained authorization for 32 units), train drivers thereof and
17618, Aug. 31, 1964; Guevarra, Phil. Corp. Law, 1961 ed., p. 7. incur such other expenses, so as to put the service along the lines acquired
[31]
36 Am. Jur. 548; 18 Am. Jur. 2nd 563-564. in good, operating and competing condition.
[39]
[32]
94 A.L.R. 346, 348. See Secs. 16-C, 19 and 20-A, Com. Act 146.
[40]
[33]
Secs. 15 and 18, Com. Act 146. National Coal Co. v. Public Utility Commission, 47 Phil. 356, 360.
[41]
[34]
The 10-year period will expire on January, 1969. Hence, it is practically 67 Phil. 577.
over. [42]
See Negros Ice & Cold Storage Co. Inc. v. PSC, 90 Phil. 138. See also 58
[35]
Recent cases have enlarged the concept of good will over C.J.S. 1051.
the behavioristic resort of old customers to the old place of business. It is [43]
66 Phil. 645.
now recognized that "It may include in addition to those factors all that goes
[44]
with a business in excess of its mere capital and physical value, such as G.R. No. L-10834, April 28, 1960.
reputation for promptness, fidelity, integrity, politeness, business sagacity
[45]
and commercial skill in the conduct of its affairs, solicitude for the welfare of See secs. 25 & 26, Rule 39, Rules of Court.
customers and other tangible elements which contribute to successful
commercial venture." (Footnotes to p. 4592, Williston on Contracts, Vol. 5,
citing cases.)
[36]
Corbin on Contracts, Vol. 6, Sec. 1385, p. 483.
[37]
Del Castillo v. Richmond, 45 Phil. 683, citing Anchor Electric
Co. v. Hawkes, 171 Mass. 101; Alger v. Tacher, 19 Pickering (Mass.) 51;
Taylor v. Blanchard, 13 Allen (Mass.) 370; Lurkin Rule Co. v. Fringeli, 57 Ohio
State 596; Fowle v. Park, 131 U.S. 88; 97; Diamond Match Co. v. Reeber, 106
N.Y. 473; National Benefit Co. v. Union Hospital Co., 45 Minn. 272; Swigert &
Howard v. Tilden, 121 Iowa, 650. See also Ollendorf v. Abrahamson, 38 Phil.

Page 79
585.

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