CANQUE v.

CA
April 13, 1999 | Mendoza, J. | Presentation of Evidence Reference
to writing
Digester: Santos, Ihna
SUMMARY: Canque, a contractor doing business under the name
and style RDC Construction, had various contracts with the
government. In connection with these contracts, Canque entered
into 2 contracts with Socor Construction Corp. for delivery of
materials and rendering of services. When Socor sent Canque a
bill for the payment for said materials and services, Canque
refused to pay, hence, Socor brought a suit against Canque. By
analyzing the Book of Collectible Accounts of Socor Construction,
the trial court was convinced that the entries (both payments and
billings) recorded thereat are credible, hence, it ruled in favor of
Socor. CA affirmed the trial courts ruling. Canque is now arguing
that the CA erred in admitting in evidence as entries in the course
of business the entries in Socor Constructions Book of Collectible
Accounts, considering that the person who made said entries
actually testified in this case but unfortunately had no personal
knowledge of said entries. While SC agreed that the entries in the
Book of Collectible Accounts do constitute competent evidence to
show delivery of materials by Socor, as the business entries in
question do not meet the first and third requisites for the
admission in evidence of entries in corporate books, there were
other competent evidence presented by Socor supporting the
entries recorded under the Book of Collectible Accounts. Hence,
SC upheld the CAs ruling that Canque is liable to pay Socor the
amount demanded from her, plus interest.
DOCTRINE: The Book of Collectible Accounts is not really being
presented for another purpose. Socors counsel offered it for the
purpose of showing the amount of petitioners indebtedness. This
is also the purpose for which its admission is sought as a
memorandum to refresh the memory of Dolores Aday as a witness.
In other words, it is the nature of the evidence that is changed, not
the purpose for which it is offered.
Under Rule 132, Sec. 10, the memorandum used to refresh the
memory of the witness does not constitute evidence, and may not
be admitted as such, for the simple reason that the witness has
just the same to testify on the basis of refreshed memory. In other
words, where the witness has testified independently of or after
his testimony has been refreshed by a memorandum of the events

in dispute, such memorandum is not admissible as corroborative

evidence. It is selfevident that a witness may not be corroborated
by any written statement prepared wholly by him.
FACTS:
Rosella Canque is a contractor doing business under the name
and style RDC Construction. At the time material to this case,
she had contracts with the government for (a) the restoration
of CebuToledo wharf road; (b) the asphalting of Lutopan access
road; and (c) the asphalting of Babag road in Lapulapu City. In
connection with these projects, Canque entered into two
contracts with private respondent Socor Construction
Corporation. (see notes for contents of contracts)
Socor Construction sent Canque a bill containing a revised
computation, for P299,717.75 plus interest at the rate of 3% a
month, representing the balance of Canques total account of
P2,098,400.25 for materials delivered and services rendered by
Socor Construction under the two contracts. However, Canque
refused to pay the amount, claiming that private respondent
failed to submit the delivery receipts showing the actual weight
in metric tons of the items delivered and the acceptance
thereof by the government.
Socor Construction brought suit in the RTC of Cebu to recover
from Canque the sum of P299,717.75, plus interest at the rate
of 3% a month.
In her answer, Canque admitted the existence of the contracts
with Socor Construction as well as the receipt of the billing
dated May 28, 1986. However, she disputed the correctness of
the bill saying that there is no agreement that Socor
Construction will charge 3% per month interest.
Canque subsequently amended her answer denying she had
entered into sub contracts with Socor Construction.
During the trial, Socor Construction, as plaintiff, presented its
vice-president, Sofia Sanchez, and Dolores Aday, its
bookkeeper.
Canques evidence consisted of her lone testimony.
Trial court rendered its decision ordering Canque to pay the
sum of P299,717.75 plus interest at 12% per annum, and costs.
By analyzing the Book of Collectible Accounts of Socor
Construction, the trial court was convinced that the entries
(both payments and billings) recorded thereat are credible. The
trial court further ruled that in spite of the fact that the

contracts did not have any stipulation on interest, interest may

be awarded in the form of damages under Art. 2209, CC.
On appeal, CA affirmed the trial courts ruling and upheld its
reliance on Socor Constructions Book of Collectible Accounts
on the basis of Rule 130, Sec. 37, ROC. Hence, this appeal.

RULING: CA decision affirmed.

Whether CA erred in admitting in evidence as entries in the
course of business the entries in Socor Constructions Book
of Collectible Accounts (considering that the person who
made said entries actually testified in this case but
unfortunately had no personal knowledge of said entries
YES.
1st sub-issue: Whether the entries in the Book of Collectible
Accounts constitute competent evidence to show delivery of
materials by Socor NO
Canque contends that the presentation of the delivery receipts
duly accepted by the then Ministry of Public Works and
Highways is required under the contracts and is a condition
precedent for her payment of the amount claimed by Socor.
Canque argues that the entries in Socors Book of Collectible
Accounts cannot take the place of the delivery receipts and
that such entries are mere hearsay and, thus, inadmissible in
evidence.
SC: The stipulation in the 2 contracts requiring the submission
of delivery receipts does not preclude proof of delivery of
materials by Socor in some other way.
The question is whether the entries in the Book of Collectible
Accounts constitute competent evidence to show such delivery.
Socor cites Rule 130, Sec. 37 of ROC and argues that the
entries in question constitute entries in the course of
business sufficient to prove deliveries made for the
government projects.
o Rule 130, Sec. 37 Entries in the course of business.
Entries made at, or near the time of the transactions to
which they refer, by a person deceased, outside of the
Philippines or unable to testify, who was in a position to
know the facts therein stated, may be received as prima
facie evidence, if such person made the entries in his
professional capacity or in the performance of duty and in
the ordinary or regular course of business or duty.

The admission in evidence of entries in corporate books

requires the satisfaction of the following conditions:
1) The person who made the entry must be dead, outside the
country or unable to testify;
2) The entries were made at or near the time of the
transactions to which they refer;
3) The entrant was in a position to know the facts stated in
the entries;
4) The entries were made in his professional capacity or in
the performance of a duty, whether legal, contractual,
moral or religious; and
5) The entries were made in the ordinary or regular course
of business or duty.
SC: The business entries in question do not meet the first and
third requisites. Dolores Aday, who made the entries, was
presented by private respondent to testify on the account of
RDC Construction. It was in the course of her testimony that
the entries were presented and marked in evidence. There was,
therefore, neither justification nor necessity for the
presentation of the entries as the person who made them was
available to testify in court.
o Necessity is given as a ground for admitting entries, in
that they are the best available evidence. Said a learned
judge: What a man has actually done and committed to
writing when under obligation to do the act, it being in the
course of the business he has undertaken, and he being
dead, there seems to be no danger in submitting to the
consideration of the court.
o The person who may be called to court to testify on these
entries being dead, there arises the necessity of their
admission without the one who made them being called to
court be sworn and subjected to cross examination. And
this is permissible in order to prevent a failure of justice.
Moreover, Aday admitted that she had no personal knowledge
of the facts constituting the entry. She said she made the
entries based on the bills given to her but she has no
knowledge of the truth or falsity of the facts stated in the bills.
The deliveries of the materials stated in the bills were
supervised by an engineer for (such) functions. Whether or
not the bills given to Aday correctly reflected the deliveries
made in the amounts and on the dates indicated was a fact that
could be established by the project engineer alone who,
however, was not presented during trial.

Rule (according to C.J. Moran): When the witness had no

personal knowledge of the facts entered by him, and the
person who gave him the information is individually
known and may testify as to the facts stated in the entry
which is not part of a system of entries where scores of
employees have intervened, such entry is not admissible
without the testimony of the informer.

2nd sub-issue: Whether the entries in the Book of Collectible

Accounts, although cannot be considered an exception to the
hearsay rule, may be admitted under Rule 132, Sec. 10, ROC NO
o SEC. 10. When witness may refer to memorandum.A
witness may be allowed to refresh his memory respecting
a fact, by anything written by himself or under his
direction at the time when the fact occurred, or
immediately thereafter, or at any other time when the fact
was fresh in his memory and he knew that the same was
correctly stated in the writing; but in such case the
writing must be produced and may be inspected by the
adverse party, who may, if he chooses, crossexamine the
witness upon it, and may read it in evidence. So, also, a
witness may testify from such a writing, though he retain
no recollection of the particular facts, if he is able to
swear that the writing correctly stated the transaction
when made; but such evidence must be received with
caution.
Canque counters that evidence which is inadmissible for the
purpose for which it was offered cannot be admitted for
another purpose. Citing C.J. Morans Commentaries: The
purpose for which the evidence is offered must be specified.
Where the offer is general, and the evidence is admissible for
one purpose and inadmissible for another, the evidence should
be rejected. Likewise, where the offer is made for two or more
purposes and the evidence is incompetent for one of them, the
evidence should be excluded.
SC: It should be noted, however, that the Book of Collectible
Accounts is not really being presented for another purpose.
Socors counsel offered it for the purpose of showing the
amount of petitioners indebtedness. This is also the purpose
for which its admission is sought as a memorandum to refresh
the memory of Dolores Aday as a witness. In other words, it is
the nature of the evidence that is changed, not the purpose for
which it is offered.

Be that as it may, considered as a memorandum, the Book of

Collectible Accounts does not itself constitute evidence.
o Borromeo v. CA: Under the above provision (Rule 132,
Sec. 10), the memorandum used to refresh the memory of
the witness does not constitute evidence, and may not be
admitted as such, for the simple reason that the witness
has just the same to testify on the basis of refreshed
memory. In other words, where the witness has testified
independently of or after his testimony has been refreshed
by a memorandum of the events in dispute, such
memorandum is not admissible as corroborative evidence.
It is selfevident that a witness may not be corroborated by
any written statement prepared wholly by him.
As the entries in question were not made based on personal
knowledge, they could only corroborate Dolores Adays
testimony that she made the entries as she received the bills.

Whether CA decision should be reversed as it only had

inadmissible evidence to support it NO.
Aside from the Book of Collectible Accounts, Socor presented
other documents. (see notes)
As the trial court found, the entries recorded under the Book of
Collectible Accounts were supported by other documents
which are all Socor Billings under the account of RDC
Construction. These billings were presented and duly received
by the authorized representatives of Canque. The
circumstances obtaining in the case at bar clearly show that for
a long period of time after receipt thereof, RDC never
manifested its dissatisfaction or objection to the aforestated
billings submitted by plaintiff. Neither did defendant
immediately protest to plaintiffs alleged incomplete or
irregular performance.
In view of these facts, SC believe that Art. 1235, CC is
applicable.
o Art. 1235. When the obligee accepts the performance,
knowing its incompleteness and irregularity and without
expressing any protest or objection, the obligation is
deemed complied with.
There is no question that Socor supplied RDC Construction
with Item 302 (Bituminous Prime Coat), Item 303 (Bituminous
Tack Coat) and Item 310 (Bituminous Concrete Surface
Course) in all the three projects of the latter. The Lutopan
Access Road project, the Toledo wharf project and the BabagLapulapu Road project.

As to why Canque is liable to pay Socor, plus interest

While Canque had previously paid Socor about P1,400,000.00
for deliveries made in the past, she did not show that she made
such payments only after the delivery receipts had been
presented by Socor.
On the other hand, it appears that Canque was able to collect
the full amount of project costs from the government, so that
Canque would be unjustly enriched at the expense of Socor if
she is not made to pay what is her just obligation under the
contracts.
NOTES:
1st contract (April 26, 1985):
SCOPE OF WORK:
a. The SubContractor agrees to perform and execute the
Supply, Lay and Compact Item 310 and Item 302;
b. That Contractor shall provide the labor and materials
needed to complete the project;
c. That the Contractor agrees to pay the Sub Contractor the
price of One Thousand Pesos only (P1,000.00) per Metric
Ton of Item 310 and Eight Thousand Only (P8,000.00) per
Metric Ton of Item 302;
d. That the Contractor shall pay the SubContractor the
volume of the supplied Item based on the actual weight in
Metric Tons delivered, laid and compacted and accepted by
the MPWH;
e. The construction will commence upon the acceptance of the
offer.

b. That the Contractor should inform or give notice to the

Supplier two (2) days before the delivery of such items;
c. That the Contractor shall pay the Supplier the volume of
the supplied items on the actual weight in metric tons
delivered and accepted by the MPWH fifteen (15) days after
the submission of the bill;
d. The delivery will commence upon the acceptance of the
offer.

On the other hand, no proof was ever offered by Canque to

show the presence of other contractors in those projects. SC
therefore concluded that it was Socor Construction Corp. alone
who supplied RDC with Bituminous Prime Coat, Bituminous
Tack Coat and Bituminous Concrete Surface Course for all the
aforenamed three projects

2nd contract (July 23, 1985):

SCOPE OF WORK:
a. The Supplier agrees to perform and execute the delivery of
Item 310 and Item 302 to the jobsite for the Asphalting of
DAS Access Road and the Front Gate of ACMDC, Toledo
City;

Other documents presented by Socor Construction:

1) Exhibit AContract Agreement dated 26 April 1985 which
contract covers both the Toledo wharf project and the
Babag Road project in Lapulapu City.
2) Exhibit BContract Agreement dated 23 July 1985 which
covers the DAS Asphalting Project.
3) Exhibit CRevised Computation of Billings submitted on
May 28, 1986.
4) Exhibit Dan affidavit executed by [petitioner] to the
effect that she has no more pending or unsettled
obligations as far as Toledo Wharf Road is concerned.
5) Exhibit D1Statement of Work Accomplished on the Road
Restoration of CebuToledo wharf project.
6) Exhibit Eanother affidavit executed by [petitioner]
attesting that she has completely paid her laborers at the
project located at Babag, Lapulapu City.
7) Exhibits F, G, G1, G2, G3Premiums paid by [private
respondent] together with the receipts for filing fees.
8) Exhibits H, I, Jcertifications issued by OIC, MPWH,
Regional Office; Lapulapu City, City Engineer; Toledo City
Treasurers Office respectively, proving that RDC
construction has no more collectibles with all the said
government offices in connection with its projects.
9) Exhibit LBill No. 057 under the account of RDC
Construction in the amount of P153,382.75 dated August
24, 1985.
10) Exhibit MBill No. 069 (RDCs account), in the amount of
P1,701,795.00 dated November 20, 1985.
11) Exhibit NBill No. 071 (RDCs account) in the amount of
P47,250.00 dated November 22, 1985.
12)
Exhibit OBill No. 079 (RDCs account) in the
amount of P7,290.00 dated December 6, 1985.