Lara's Gift and Decors, Inc. v. Philippine National Bank General Insurers Co., Inc.
REITERATIONFacts
The Antecedents: Petitioner Lara's Gifts and Decors, Inc. (LGDI) leased warehouses that served as its production and storage areas. Its goods, raw materials, and equipment were insured against fire with respondents PNB General Insurers Co., Inc. (PNB Gen) and UCPB General Insurance Co., Inc. (UCPB). A fire razed some of the warehouses, leading LGDI to file a claim. Respondents denied the claim, citing, among others, violation of policy conditions, misdeclaration of laser machines, and absence of independent evidence to substantiate the loss. Procedural History: LGDI filed a complaint for Specific Performance and Damages against the respondents before the RTC. During pre-trial, parties submitted pre-trial briefs and allotted several meetings for exhibit marking. A Pre-Trial Order was issued, with parties reserving the right to present additional documentary exhibits. Trial commenced, and during the cross-examination of Luis Raymond Villafuerte, petitioner sought to introduce "Questioned Documents" (Purchase Orders, Sales Invoices, Delivery Receipts) and the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte. Respondents objected, arguing these were not presented during pre-trial and violated procedural rules. The RTC, in its Omnibus Orders dated October 1, 2014, and November 26, 2014, denied respondents' motions and allowed the presentation of the questioned documents and affidavit. Respondents filed a petition for certiorari with the Court of Appeals (CA), imputing grave abuse of discretion. The Petition: Petitioner LGDI filed a petition for review under Rule 45 of the Rules of Court, seeking to reverse the CA's Amended Decision. The CA, in its Amended Decision, annulled and set aside the RTC's Omnibus Orders, ruling that the RTC erred in allowing the introduction of the 2nd Supplemental Judicial Affidavit and the Questioned Documents due to petitioner's non-compliance with the Judicial Affidavit Rule and the prohibition against presenting evidence not identified during pre-trial. The CA also deemed Mr. Villafuerte incompetent to testify on the documents as his testimony would be hearsay. Petitioner argues that the introduction of additional evidence during re-direct examination is not absolutely proscribed and that the trial court has discretion to allow it for good cause shown.
Issue(s)
Whether the Court of Appeals erred in disallowing the introduction of additional documentary exhibits during trial and the filing of the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte. Whether the trial court committed grave abuse of discretion in allowing the presentation of the "Questioned Documents" and the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte, and whether Mr. Villafuerte's competence to testify on the "Questioned Documents" was prematurely considered.
Ruling
The petition is GRANTED. The assailed Amended Decision of the Court of Appeals is REVERSED and SET ASIDE. The Court of Appeals' December 21, 2015 Decision is REINSTATED.
Ratio Decidendi
On whether the Court of Appeals erred in disallowing the introduction of additional documentary exhibits during trial and the filing of the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte: The Court held that the trial court did not commit grave abuse of discretion. It reiterated that the Judicial Affidavit Rule (JA Rule) and the Guidelines on Pre-Trial do not impose a blanket prohibition on the submission of additional evidence after trial has commenced. Section 10 of the JA Rule allows for the late submission of affidavits and exhibits "only once" if the delay is for a valid reason, would not unduly prejudice the opposing party, and the defaulting party pays a fine. Furthermore, the Guidelines on Pre-Trial, while requiring evidence to be identified and pre-marked during pre-trial, also grant the trial court discretion to allow additional evidence for "good cause shown." In this case, the trial court allowed the "Questioned Documents" during the re-direct examination of Mr. Villafuerte because the need for them arose from the specific questions posed by the respondents' counsel during cross-examination, which injected the matter of proofs of purchase and job orders. Pursuant to Section 7, Rule 132 of the Rules of Court, Mr. Villafuerte could be re-examined to explain or supplement his answers given during cross-examination. The Court also noted that the issue of Mr. Villafuerte's competence to testify on the documents is premature, as the formal offer of evidence, where such objections are properly raised, had not yet been made. The admission of the 2nd Supplemental Judicial Affidavit was also justified by the reservation made by all parties in the Pre-Trial Order to present additional documentary exhibits during the trial. This reservation was considered a waiver of objections to the introduction of such evidence. The Court emphasized that respondents' counsel's manifestation during a hearing, where they agreed to wait for the President to identify the documents, further supported the trial court's decision. The Court ruled that the trial court did not gravely abuse its discretion in allowing the questioned documents and the affidavit, reinstating the CA's earlier decision that affirmed the RTC's orders. On whether the trial court committed grave abuse of discretion in allowing the presentation of the "Questioned Documents" and the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte, and whether Mr. Villafuerte's competence to testify on the "Questioned Documents" was prematurely considered: The Court found the issue of Mr. Villafuerte's competence to testify on the "Questioned Documents" to be premature. It clarified that the admissibility of evidence is determined upon formal offer, as mandated by Section 34, Rule 132 of the Rules of Court. Before private documents can be received in evidence, their due execution and authenticity must be proved either by anyone who saw the document executed or written, or by evidence of the genuineness of the signature or handwriting of the maker. The failure to properly authenticate documents would result in their inadmissibility, but this ruling can only be made after the proponent has formally offered the evidence, which occurs after the presentation of testimonial evidence. Therefore, the objection to Mr. Villafuerte's competence at the stage of introduction of the documents was not yet ripe for resolution by the trial court.
Main Doctrine
The Court held that the trial court did not commit grave abuse of discretion in allowing the introduction of additional documentary exhibits and the 2nd Supplemental Judicial Affidavit of Mrs. Villafuerte. This is because the Judicial Affidavit Rule and the Guidelines on Pre-Trial, while promoting efficiency, do not absolutely prohibit the submission of evidence after trial has commenced. Such submissions are permissible under specific conditions, including a valid reason for delay, a single instance of late submission, and no undue prejudice to the opposing party. Moreover, a reservation made in the Pre-Trial Order to present additional evidence can be considered a waiver of objections to its later submission. The Court also clarified that a petition for certiorari is confined to correcting grave abuse of discretion amounting to lack or excess of jurisdiction, not mere errors of judgment.