Malayan Insurance Co., Inc. v. Philippine Nails and Wires Corporation
REITERATIONFacts
The Antecedents: Respondent Philippine Nails and Wires Corporation insured a shipment of steel billets with petitioner Malayan Insurance Company Inc. The shipment was short by 377.168 metric tons. Respondent claimed insurance for the value of the undelivered steel billets, plus customs duties, taxes, and other charges. Petitioner refused to pay. Procedural History: Respondent filed a complaint for sum of money with the RTC of Pasig. Petitioner's motion to dismiss was denied. Petitioner filed a petition for prohibition with the Court of Appeals, which was eventually dismissed. Respondent filed an amended complaint, and petitioner was declared in default for failing to file an answer within the prescribed period. The RTC rendered a judgment by default in favor of the respondent. The RTC granted respondent's motion to execute the judgment pending appeal. Petitioner filed a notice of appeal. The RTC favorably considered petitioner's motion to stay execution pending appeal and approved a supersedeas bond. The Petition: On appeal, petitioner argued that the trial court erred in rendering judgment by default despite issues being joined, in awarding damages based on unauthenticated documentary evidence and hearsay, and in admitting irregular documentary evidence. The Court of Appeals affirmed the RTC decision. Petitioner's motion for reconsideration was denied, leading to the present petition.
Issue(s)
Whether Jeanne King's testimony regarding the shortage in delivery was inadmissible hearsay and thus without probative value. Whether respondent properly authenticated the documentary evidence it submitted at the trial, and whether these documents could be utilized to prove the insured cargo or the short delivery.
Ruling
The petition is GRANTED. The decision of the Court of Appeals dated September 30, 1998, and its resolution on March 25, 1999, in CA-G.R. CV No. 45547 are REVERSED and SET ASIDE. Civil Case No. 63445 is hereby ordered DISMISSED.
Ratio Decidendi
On the issue of hearsay testimony: The Supreme Court held that while Jeanne King, who handled the respondent's importations and insurance coverage, was competent to testify on the volume of steel billets being imported, her testimony regarding the shortage in delivery was hearsay. She did not have personal knowledge of the actual steel billets received, and her summary of received steel billets was based on receipts prepared by other persons. Therefore, her testimony on this point had no probative value, even if not objected to. On the issue of authentication of documentary evidence: The Court found the petitioner's contention meritorious. Private documents offered as evidence must be authenticated in accordance with Section 20, Rule 132 of the Rules of Court. This requires proof of due execution and authenticity, typically by the person who executed it, or by evidence of the genuineness of the signature or handwriting of the maker. The respondent admitted that Jeanne King was none of the persons qualified to authenticate the documents. She merely made a summary based on unauthenticated documents like the bill of lading and the SGS report. Consequently, these documents could not be utilized to prove the insured cargo or the short delivery, as they lacked a proven real basis.
Main Doctrine
A witness's testimony regarding facts not personally perceived by them, even if they prepared a summary based on documents prepared by others, constitutes hearsay and lacks probative value. Furthermore, private documents offered as evidence must be authenticated in accordance with the Rules of Court before they can be admitted.