VILLA REY TRANSIT v.
FERRER The new Villa Rey thereafter bought 5 certificates from a certain
G.R. No. L23893 / October 29, 1968 / Angeles, J. / EVIDENCE Rules of Admissibility:
Documentary Evidence BEST EVIDENCE RULE / ECSCALA
NATURE Appeal
PETITIONERS Villa Rey Transit Inc.
RESPONDENTS Eusebio Ferrer, Pangasinan Transportation Co.
(Pantranco)
SUMMARY. Villa Rey Transit sought the annulment of the sheriff's sale of 2
certificates of public convenience in favor of Ferrer, which the latter sold to
Pantranco. Villa Rey had previously sold to Pantranco its 2 certificates with
the condition that the former would not engage in TPU service identical or
competing with the latter for 10 years. However, not long after, a
corporation called Villa Rey Transit Inc was formed with the wife of
Villarama, owner of Villa Rey and some of his relatives as incorporators.
The new Villa Rey thereafter bought 5 certificates from a certain Fernando,
2 of which were awarded to Ferrer in an execution sale. Pantranco bought
the said certificates and alleged that they have a better right than Villa Rey
because 1. Villarama, owner of Villa Rey Transit and Villa Rey Transit Inc are
one and the same 2. Thus, he violated the condition in their previous sale.
SC ruled that Villa Rey had a better right over the certificates ALTHOUGH
he cannot operate a TPU service for 10 years pursuant to the previous
agreement BUT due to Villarama's breach of the condition in the contract
of sale (he actually started operating a TPU service pending resolution of
this case), he is to pay damages to Pantranco.
TOPIC: Photostatic copies of ledger entries and vouchers were entered
into evidence. Such were telling of how Villarama had control over the
funds of Villa Rey Transit Inc. as if he was actually the owner of the
corporation. Villarama contended that such documents should be
inadmissible since they were merely photostatic copies of the originals,
the best evidence being the originals themselves.
Court held: The exception to the best evidence rule which is when the
originals are in the custody of the adverse party applies as all the
requisites were complied with. See Doctrine.
DOCTRINE. Requisites:
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.
FACTS.
See summary. Loljk.
Villa Rey sold to Pantranco its 2 certificates of public convenience with
the condition that the former would not engage in TPU service identical
or competing with the latter for 10 years.
Not long after, a corporation called Villa Rey Transit Inc. was formed
with the wife of Villarama (who was the owner of Villa Rey Transit) and
some of his relatives as incorporators. Natividad Villarama, the wife,
was also the treasurer of the said corporation.
Valentin Fernando payable in instalments. The 2 nd installment was
payable upon approval of the sale of the PSC.
Pending the approval, 2 of the certificates were levied by the Sheriff of
Manila pursuant to a writ of execution issued against Fernando. Ferrer,
the judgment creditor in that case, was declared the highest bidder in
the execution sale. Villa Rey sought the annulment of this sheriff's sale.
Pantranco bought these 2 certificates from Ferrer and alleged that they
have a better right than Villa Rey because
1. sale between Fernando and Villarama was subj. to the condition of
PSC approval
2. when the execution sale occurred, PSC hasnt approved the sale
3. Villarama, owner of Villa Rey Transit and Villa Rey Transit Inc are
one and the same
4. thus, he violated the condition in their previous sale
ISSUES & RATIO.
1. BASED ON TOPIC: WON the photocopies of the ledger entries
and vouchers of Villa Rey Transit Inc. are admissible in
evidence. YES.
They fall under one of the exceptions provided in Sec. 5,
Rule 130 of the ROC, particularly the 2 nd one, which states
that photocopies are admissible in lieu of originals when
the latter are in the custody or under the control of the
party against whom the evidence is offered.
See Doctrine for requisites to be complied with in order to fall
under this exception.
Villarama has practically admitted the second and fourth
requisites.
As to the third, he admitted their previous existence in the files of
the Corporation and also that he had seen some of them.
As to the 1st element, Villarama's defense was that the originals
were missing, hence, not in their possession.
HOWEVER, the Court held that 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.
Also, among the exceptions to the best evidence rule is "when the
original has been lost, destroyed, or cannot be produced in court."
In this case, Villa Rey Transit admitted the loss of such documents.
o Where were these photocopies relevant? Relevant to the issue as
to WON Villarama was actually the owner of Villa Rey Transit Inc.,
despite not being a stockholder or incorporator thereof. These ledger
entries and vouchers showed how Villarama had comingled his
personal funds and transactions with those made in the name of the
Corporation.
o By preponderance of evidence, Court held that Villa Rey Transit, Inc. is 2.
an alter ego of 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.
3.
DECISION.
1. Sale of the two certificates of public convenience by
Fernando to Villa Rey Transit, Inc. is declared preferred
over that made by the Sheriff
Reversed, insofar as it dismisses the third party complaint filed by
Pantranco. against Jose M. Villarama. Villa Rey Transit, Inc. is
NOT an entity distinct and separate from the personality of
Jose M. Villarama
Case is remanded to the trial court for the reception of evidence in
consonance with the above findings as regards the amount of
damages suffered by Pantranco