Canque v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Rosella D. Canque, operating as RDC Construction, engaged in several government infrastructure projects. To fulfill these contracts, Canque entered into two agreements with respondent Socor Construction Corporation. The first contract, dated April 26, 1985, stipulated that Socor would supply and lay Items 310 and 302, with RDC providing labor and materials, and RDC agreeing to pay Socor P1,000.00 per metric ton for Item 310 and P8,000.00 per metric ton for Item 302, based on actual weight accepted by the Ministry of Public Works and Highways (MPWH). The second contract, dated July 23, 1985, involved Socor supplying Items 310 and 302 for specific access roads, with payment to be made fifteen days after submission of the bill, based on actual weight accepted by MPWH. Procedural History: On May 28, 1986, Socor Construction Corporation issued a bill to RDC Construction for P299,717.75, plus interest, representing the balance of their accounts. Canque refused to pay, citing Socor's failure to provide delivery receipts with actual weights and MPWH acceptance. Consequently, Socor filed a collection suit in the Regional Trial Court (RTC) of Cebu on September 22, 1986. Canque admitted the contracts but disputed the bill's accuracy, alleging issues with delivery acknowledgments, material quality, and prior payments. The RTC ruled in favor of Socor, ordering Canque to pay the principal sum, interest, attorney's fees, and costs. The Court of Appeals affirmed the RTC's decision, leading to the present petition. The Petition: This petition for review on certiorari seeks to reverse the Court of Appeals' decision. Petitioner Canque argues that the respondent court erred in admitting entries from Socor's Book of Collectible Accounts (Exhibit K) as evidence in the course of business, contending that the person who made the entries lacked personal knowledge and that the entries cannot substitute for required delivery receipts. Canque asserts that the evidence used to support the decision is inadmissible hearsay. The petition further questions the admission of these entries, even if considered as a memorandum to refresh a witness's memory, arguing that such memoranda do not constitute evidence themselves unless specific conditions are met and that the entries were not based on personal knowledge. Despite these contentions, the Supreme Court found other competent evidence, including the contracts, various billings, and affidavits, which, when considered with Article 1235 of the Civil Code regarding acceptance of performance without protest, supported the lower courts' findings.
Issue(s)
Whether the entries in private respondent's Book of Collectible Accounts (Exh. K) are admissible as evidence, particularly as entries made in the course of business. Whether the absence of delivery receipts, as stipulated in the contracts, bars recovery by the private respondent. Whether interest may be awarded as damages in the absence of an express stipulation in the contract.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The petition for review on certiorari was denied. The dispositive portion of the Court of Appeals decision, which affirmed the RTC's judgment, was upheld.
Ratio Decidendi
On the admissibility of Exh. K as entries in the course of business: The Court held that Exh. K did not meet the requirements for admissibility as entries in the course of business under Rule 130, Section 37 of the Rules of Court. Specifically, the person who made the entries, Dolores Aday, testified in court, negating the necessity for admitting the entries due to the entrant's unavailability. Furthermore, Aday admitted she lacked personal knowledge of the facts stated in the entries, as she merely recorded information from bills given to her by the company's project engineer, who possessed the personal knowledge of the deliveries. The Court reiterated that for such entries to be admissible, the entrant must have personal knowledge of the facts stated therein, or the information must come from a system where multiple employees are involved and the entrant is merely a conduit, which was not the case here. The Court cited Moran's commentaries emphasizing that if the witness has no personal knowledge and the informant is known and available, the entry is inadmissible without the informant's testimony. On the necessity of delivery receipts: The Court clarified that while the contracts stipulated the submission of delivery receipts, this did not preclude proof of delivery by other means. However, the Court found that Exh. K, as discussed above, was not competent evidence to prove delivery. Despite this, the Court found other competent evidence to support Socor Construction's claim. The Court noted that the billings (Exhibits L, M, N, O) were presented and received by authorized representatives of RDC Construction, and RDC Construction did not protest these billings for a long period. The Court applied Article 1235 of the Civil Code, stating that when an obligee accepts the performance, knowing its incompleteness and irregularity, and without protest, the obligation is deemed complied with. The Court also found Exhibit D-1, a Statement of Work Accomplished, to be material proof of Socor Construction's complete fulfillment of its obligation. On the award of interest as damages: The Court affirmed the trial court's ruling that interest may be awarded as damages under Article 2209 of the Civil Code, even in the absence of an express stipulation for interest in the contract. Article 2209 allows for the recovery of interest as damages when a debtor incurs delay in the performance of an obligation involving the payment of a sum of money. The Court found that Canque incurred delay in paying Socor Construction for the materials and services rendered, thus justifying the award of legal interest.
Main Doctrine
Entries in a book of accounts, to be admissible as entries in the course of business, must satisfy specific requisites, including the unavailability of the entrant to testify and the entrant's personal knowledge of the facts stated. If these requisites are not met, such entries may still be admissible as a memorandum to refresh a witness's memory, but they do not constitute evidence per se and must be received with caution. The acceptance of performance with knowledge of its incompleteness, without protest, may deem the obligation complied with.