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LAGMAN prove the contents of the original, the offeror must prove
G.R. No. 165487 | July 13, 2011
the following:
(1) the existence or due execution of the original;
FACTS: (2) the loss and destruction of the original or the
● Santos applied for a license with the National Food reason for its nonproduction in court; and
Authority (NFA) to engage in warehouse business (3) on the part of the offeror, the absence of bad
(storing of palay). faith to which the unavailability of the original
○ Under the General Bonded Warehouse Act can be attributed.
approval for said license was conditioned The correct order of proof is as follows: existence, execution,
upon posting of a cash bond, a bond loss, and contents.
secured by real estate, or a bond signed by
a duly authorized bonding company. A party must first present to the court proof of loss or other
● Accordingly, petitioner Country Bankers Insurance satisfactory explanation for the non- production of the
Corporation issued Warehouse Bond No. 03304 original instrument. When more than one original copy exists,
through its agent, respondent Antonio Lagman. it must appear that all of them have been lost, destroyed, or
o Santos was the bond principal, cannot be produced in court before secondary evidence can
Lagman was the surety and NFA was be given of any one. A photocopy may not be used without
the obligee. accounting for the other originals.
● In consideration of these issuances, corresponding
Indemnity Agreements were executed by Santos. CASE AT BAR
o Lagman and other co-signors bound
themselves solidarily liable to Country Lagman mentioned during the direct examination that there
Bankers for any damages, prejudice, are actually four duplicate originals of the 1990 Bond.
losses, costs, payments, advances and Despite knowledge of the existence and whereabouts of these
expenses of whatever kind and nature duplicate originals, Lagman merely presented a photocopy. He
which it may sustain as a consequence admitted that he kept a copy of the 1990 Bond but could
of the said bond. no longer produce it because he had already severed his ties
● Santos secured a loan using his warehouse receipts as with Country Bankers. However, he did not explain why
collateral. severance of ties is by itself reason enough for the non-
○ Santos defaulted in his payment availability of his copy of the bond considering that he himself
when the loan matured. is a bondsman. Neither did he explain why he failed to
● By virtue of the surety bonds, Country Bankers secure the original from any of the 3 other custodians he
was compelled to pay P1,166,750.37. mentioned in his testimony. While he apparently was able to
○ Subsequently, Country Bankers filed find the original with the NFA Loan Officer, he was merely
a complaint for a sum of money contented with producing its photocopy. Clearly, Lagman
against Lagman. failed to exert diligent efforts to produce the original.
● Lagman: alleged that the 1989 Bonds were valid
only for 1 year from the date of their issuance, as ISSUE #2: (Insurance Law)
evidenced by receipts. Whether the 1989 Bonds have expired and the 1990 Bond
● Trial court: declared Lagman and other co-signors, novates the 1989 Bonds.
jointly and severally liable to pay Country Bankers
relying on the indemnity agreement. HELD:
● Lagman anchors his defense on 2 arguments: NO. It is continuing bond.
1) the 1989 Bonds have expired and
2) the 1990 Bond novates the 1989 Bonds The 1989 Bonds have identical provisions and they state in very
by presenting a photocopy of the 1990 clear terms the effectivity of these bonds i.e. that the bond shall
Bond. remain in force until cancelled by the Administrator of NFA. This
● CA: rejected Country Banker’s argument that the 1989 provision in the bonds is in compliance with the second paragraph
bond were continuing held that the 1989 bonds of Section 177 of Insurance Code, which specifies that a
were effective only for 1 year, as evidenced by the continuing bond, as in this case where there is no fixed expiration
receipts on the payment of premiums. date, may be cancelled only by the obligee, which is the NFA, by
the Insurance Commissioner, and by the court. The clear import of
ISSUE #1: these provisions is that the surety bonds in question cannot be
Whether the photocopy of the 1990 bond should be admitted as unilaterally cancelled by Lagman. Thus: In case of a continuing
proof. bond, the obligor shall pay the subsequent annual premium as it
falls due until the contract of suretyship is cancelled by the
HELD: obligee or by the Commissioner or by a court of competent
NO. jurisdiction, as the case may be.
Such copy is inadmissible. Under the best evidence rule, the Lagman, being a solidary debtor by virtue of the 1989 Bonds
original document must be produced whenever its contents under the Indemnity Agreements, is liable for the entire
are the subject of inquiry. obligation. Petition is GRANTED.
A review of the records reveals that Prodon did not adduce proof
sufficient to show the loss or explain the unavailability of the
original as to justify the presentation of secondary evidence. In
contrast, the records contained ample indicia of the improbability
of the existence of the Deed.