VILLA REY TRANSIT v. FERRER case, was declared the highest bidder in the execution sale.
declared the highest bidder in the execution sale. Villa Rey sought the
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.
The new Villa Rey thereafter bought 5 certificates from a certain Valentin Fernando
payable in instalments. The 2nd 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
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 2nd 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 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.
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
2. 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
3. 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