Lee vs. People

An interlocutory order admitting secondary evidence is not correctible by certiorari absent grave abuse of discretion amounting to lack or excess of jurisdiction; the admission of secondary evidence upon proof of its predicates is a factual issue addressed to the trial court’s sound discretion, and errors therein are mere errors of judgment reviewable by appeal. The offeror of secondary evidence must prove the loss or destruction of the original without bad faith, a fair preponderance of evidence raising a reasonable inference of loss or destruction, a diligent and bona fide but unsuccessful search in the proper place or places, and the due execution or existence of the original.

Neugene Marketing, Inc. (NMI) was a corporation whose stockholders included Johnson Lee, its President, and Sonny Moreno, its General Manager. Victorias Milling Company, Inc. (VMCI) was a customer of NMI. After NMI’s voluntary dissolution, the law firm of Reyes, Treyes & Fudolin was appointed trustee to collect the corporation’s receivables. The dispute implicated the Rules of Court on certiorari, review on certiorari, and the Best Evidence Rule, as well as Section 11 of the Corporation Code on voluntary dissolution.

Neugene Marketing, Inc. (NMI) was incorporated on January 27, 1978 with funds provided by the Uy family. Its authorized capital stock was ₱3 million, divided into 30,000 shares with a par value of ₱100 per share. The original incorporators and their subscriptions were Johnson Lee, 600 shares (₱60,000); Lok Chun Suen, 1,200 shares (₱120,000); Charles O. Sy, 1,800 shares (₱180,000); Eugenio Flores, Jr., 2,100 shares (₱210,000); and Arsenio Yang, Jr., 300 shares (₱30,000), for a total of 6,000 shares and ₱600,000. Stock dividends were declared on June 7, 1980 in the amount of ₱60,000 and on May 2, 1981 in the amount of ₱40,000. On May 15, 1986, Eugenio Flores, Jr. assigned his shares to Sonny Moreno (1,050 shares), Arsenio Yang, Jr. (700 shares), and Charles O. Sy (700 shares).

In June 1987, NMI sold and delivered empty white bags to Victorias Milling Company, Inc. (VMCI) in Victorias, Negros Occidental. On June 11, 1987, NMI sold 77,500 pieces for ₱565,750.00 under Charge Invoice No. 0809. On June 18, 1987, VMCI purchased 100,000 pieces for ₱730,000.00 under Charge Invoice No. 0810. On June 25, 1987, VMCI purchased 28,000 pieces for ₱204,400.00 under Charge Invoice No. 0811. In payment, VMCI issued two BPI checks payable to NMI: Check No. 068706 dated August 3, 1987 for ₱565,750.00 and Check No. 068993 dated August 19, 1987 for ₱934,400.00. The total payment was ₱1,500,150.00.

On October 13, 1987, stockholders owning two-thirds of NMI’s subscribed capital stock voted to call a stockholders’ meeting, with dissolution of the corporation on the agenda. A special stockholders’ meeting was held on October 24, 1987 in Bacolod City. Arsenio Yang, Jr. (1,050 shares), Charles Sy (2,800 shares), and Lok Chun Suen (1,400 shares), who were also directors, were present and voted to dissolve the corporation. Notices were sent to all stockholders of record, and a meeting was held on November 30, 1987 to consider dissolution; the same stockholders attended and approved the dissolution upon motion duly seconded. By Board resolution, the law firm of Reyes, Treyes & Fudolin was appointed trustee to collect all receivables of the corporation. As of November 30, 1987, the shares stood as follows: Johnson Lee, 700; Lok Chun Suen, 1,400; Charles O. Sy, 2,800; Arsenio Yang, Jr., 1,050; and Sonny Moreno, 1,050, for a total of 7,000 shares. Pursuant to Section 11 of the Corporation Code, the Securities and Exchange Commission approved the dissolution on March 1, 1988, subject to compliance with requirements such as notices to stockholders and publication. On March 22, 1988, Johnson Lee, Sonny Moreno, Leoncio Tan, and Nicanor Martin filed a petition with the Securities and Investigation Clearing Department of the SEC to annul or nullify the Certification of Filing of Resolution of Voluntary Dissolution of NMI for being contrary to law and its by-laws.

On March 8, 1988, the trustee wrote Johnson Lee requesting him to turn over ₱1,500,150.00 that he had received in payment of the empty bags sold by NMI to VMCI. He failed to do so. A verified complaint for three counts of estafa was filed against Johnson Lee and Sonny Moreno with the City Prosecutor’s Office; photocopies of Charge Invoice Nos. 0809, 0810, and 0811 were appended. After preliminary investigation, in which Johnson Lee and Moreno submitted counter-affidavits, two Amended Informations were filed with the Regional Trial Court of Negros Occidental, docketed as Criminal Cases Nos. 10010 and 10011. Except for the particulars of the checks, the accusatory portions were identical. The informations alleged that Johnson Lee, then President, and Sonny Moreno, then General Manager of NMI, had the duty and responsibility to collect, turn over, and deliver collections to NMI, represented by its Trustees Roger Reyes, Ernesto Treyes, and Eutiquio Fudolin; that they conspired and acted in concert; that having collected ₱565,750.00 covered by BPI Check No. 068766 (sic) dated August 3, 1987 as payment of VMCI, they failed and refused to deliver the amount to NMI despite demands; and that they converted or misappropriated it to their personal use and benefit, to the damage and prejudice of NMI.

During trial, the original copies of Charge Invoice Nos. 0809, 0810, and 0811 and of BPI Check Nos. 068766 and 068993 were not in the custody of the prosecution. To prove their loss, destruction, or non-availability and their authenticity and due execution, the prosecution presented Ban Hua Flores. She testified that she saw the two checks in the petitioner’s office at the Singson Building, Plaza Moraga, Sta. Cruz, Manila; that sometime in 1987 she went to the VMCI office and was told by a clerk that it would be difficult to locate the checks because they were stored in a bodega with many other checks; that the signatures on the dorsal portion of the checks were those of Johnson Lee, NMI’s President, with whom she had worked; and that he indorsed and deposited the checks on September 4, 1987 with Solidbank, instead of the BPI Plaza Cervantes branch in Manila, NMI’s official depository bank. Flores also testified that she secured microfilm copies of the checks from Solidbank and was sure that the copies of the checks and invoices were faithful reproductions of the originals. Merlita Bayaban, Manager for Corporate Affairs of VMCI, testified in obedience to a subpoena that VMCI’s records section had custody of all checks and other corporate records; that the checks and other records were lost during a flood, later described in her testimony and in the certification of Carolina Diaz as the flash flood of November 28, 1995; and that she caused a search for the documents but they could not be produced. Bayaban admitted that she did not see the original copies of the checks and was not a signatory thereto. The prosecution formally offered in evidence the petitioner’s counter-affidavit from the preliminary investigation, the charge invoices, and the checks. The accused objected on the ground that the best evidence were the original copies. On April 12, 2002, the trial court admitted the counter-affidavit and the photocopies of the checks and charge invoices, finding that the prosecution had adduced preponderant evidence that the original copies were lost, destroyed, or unavailable.

• Best Evidence Rule and Authentication: Petitioner argued that the photocopies of the checks and charge invoices were private documents offered as authentic and could not be received in evidence without proof of due execution and authenticity; the prosecution failed to present a competent witness, since Bayaban admitted she did not see the originals and was not a signatory thereto.
• Proof of Loss or Unavailability: Petitioner maintained that the prosecution failed to prove the loss, destruction, or non-availability of the original copies and that diligent efforts to locate them were futile; the competent witness would be VMCI’s records custodian, and Bayaban merely testified that a clerk failed to locate the checks because the clerk was lazy to search.
• Grave Abuse of Discretion: Petitioner alleged that the RTC judge committed grave abuse of discretion equivalent to lack or excess of jurisdiction in admitting unauthenticated photocopies in violation of the Best Evidence Rule despite repeated objections, and that ordinary appeal would not afford adequate and expeditious relief because it would require a useless and time-consuming trial.
• CA Findings as Speculative: Petitioner contended that the CA’s finding that loss or destruction was established by other evidence was devoid of support and based on surmise or conjecture, and that the CA’s assumption that prosecution witnesses with authority over the documents necessarily conducted a thorough search was speculative.
• Inhibition and Cold Neutrality: Petitioner claimed that the CA violated the dictum of cold neutrality of an impartial judge when it denied his motion for inhibition despite a member’s recusal.

• Due Execution and Authenticity: Respondent, through the Office of the Solicitor General, asserted that the prosecution proved the due execution and authenticity of the checks through Bayaban’s testimony and the petitioner’s admissions in his counter-affidavit during the preliminary investigation.
• Loss or Destruction: Respondent averred that the testimonies of Bayaban and Flores proved with reasonable certainty the loss or destruction of the original copies of the checks and the charge invoices.

• Propriety of Certiorari: Whether the petition for certiorari under Rule 65 is the proper remedy to assail the RTC’s interlocutory order admitting photocopies of the checks and charge invoices as secondary evidence.
• Grave Abuse of Discretion / Admission of Secondary Evidence: Whether the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in admitting the photocopies in lieu of the originals, considering the alleged failure to prove the predicates for secondary evidence and the Best Evidence Rule.

• Propriety of Certiorari: No. Certiorari under Rule 65 is not the proper remedy to assail an interlocutory order admitting secondary evidence; the RTC acted within its jurisdiction, and any error in the admission of evidence is an error of judgment correctible by appeal, not certiorari, absent grave abuse of discretion.
• Grave Abuse of Discretion / Admission of Secondary Evidence: No. The admission of secondary evidence upon proof of its predicates is a factual issue addressed to the trial court’s sound discretion; the prosecution adduced preponderant evidence of loss or destruction and due execution or authenticity through Bayaban’s testimony and the petitioner’s admissions, so no grave abuse was shown.

• Propriety of Certiorari: Certiorari requires a tribunal exercising judicial or quasi-judicial functions that acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and no appeal or plain, speedy, and adequate remedy. The RTC had jurisdiction over the estafa cases, and the order admitting the photocopies was issued in the exercise of that jurisdiction. Even if erroneous, the admission of secondary evidence predicated on proof of the conditions sine qua non is a factual issue addressed to the trial court’s sound discretion; absent grave abuse, the order must be sustained. The remedy was to adduce evidence and, if convicted, appeal. Rule 45 permits only questions of law, and resolving petitioner’s factual claims would require calibrating testimonial and documentary evidence, which is proscribed. Interlocutory orders are generally not subject to certiorari. Petitioner’s defenses—that the funds were corporate, that misappropriation and damage were absent, and that the money was kept for the corporation or turned over to the majority stockholder—were trial defenses, not jurisdictional grounds. The petition was also premature because a motion to quash under Rule 117, Section 3(a) was available; denial of a motion to quash does not ordinarily justify certiorari, and a motion for reconsideration and the grounds under Rule 65 were required. The CA’s factual findings are conclusive absent a showing of an exception, which petitioner failed to make.
• Grave Abuse of Discretion / Admission of Secondary Evidence: Under Rule 130, Section 3, when the subject of inquiry is the contents of a document, the original must be produced unless, among other exceptions, it has been lost or destroyed or cannot be produced without bad faith on the offeror’s part. The offeror of secondary evidence must prove (a) loss or destruction of the original without bad faith, which may be shown by circumstantial evidence of routine practices of destruction; (b) by fair preponderance of evidence, a reasonable inference of loss or destruction; and (c) a diligent and bona fide but unsuccessful search in the proper place or places. The offeror must also prove the due execution or existence of the original under Rule 130, Section 5, and, for a private document offered as authentic, due execution and authenticity under Rule 132, Section 20 by an eyewitness or evidence of the genuineness of the signature or handwriting; the adverse party’s admission is admissible for that purpose. Here, the originals of the checks were returned to VMCI after negotiation and honor, and the charge invoices were kept by VMCI. The prosecution offered the photocopies to prove their contents, so it bore the burden of proving the predicates. The Certification signed by Carolina Diaz was inadmissible because she was not presented as a witness. However, Bayaban testified under subpoena that VMCI’s records, including the charge invoices and checks, were destroyed in the flash flood of November 28, 1995, that the loss was known to all employees, and that a search was made but the documents could not be produced. The petitioner’s counter-affidavit also admitted that he received ₱1,500,150.00 from VMCI in full payment for NMI’s deliveries, that the amount was in the corporation’s custody, and that he refused to turn it over to the trustee. These admissions proved the existence, due execution, and authenticity of the charge invoices and checks, such that the prosecution no longer needed evidence aliunde. The prosecution therefore mustered the requisite quantum of evidence to prove the predicates for admitting the photocopies, and no grave abuse of discretion was shown.

• Certiorari is not a substitute for appeal; interlocutory orders — Rule 65 certiorari is limited to errors of jurisdiction and grave abuse of discretion; it does not correct errors of judgment or procedure. Interlocutory orders are generally not subject to certiorari. Applied: the RTC’s admission of secondary evidence was an interlocutory evidentiary ruling within its jurisdiction; petitioner’s remedy was trial and appeal.
• Grave abuse of discretion — Defined as capricious, whimsical, arbitrary, or despotic exercise of judgment equivalent to lack of jurisdiction; mere abuse is insufficient. Applied: no grave abuse because the admission of secondary evidence was a factual issue addressed to the trial court’s discretion and supported by evidence.
• Best Evidence Rule — When the subject of inquiry is the contents of a document, no evidence is admissible other than the original, except when the original has been lost or destroyed, or cannot be produced without bad faith, is in the adverse party’s custody, consists of numerous accounts, or is a public record. Applied: the prosecution sought to prove the contents of the checks and charge invoices, so the original was required unless an exception applied.
• Predicates for secondary evidence — The offeror must prove (a) loss or destruction of the original without bad faith; (b) fair preponderance raising a reasonable inference of loss or destruction; and (c) a diligent and bona fide but unsuccessful search in the proper place or places. The due execution or existence of the original must also be proved. Applied: Bayaban’s testimony and petitioner’s admissions established these predicates.
• Proof of private documents — Before a private document offered as authentic is received in evidence, its due execution and authenticity must be proved by anyone who saw it executed or written, or by evidence of the genuineness of the signature or handwriting; the adverse party’s admission is admissible. Applied: petitioner’s counter-affidavit admitted the receipt of the amount and the underlying transactions, proving due execution and authenticity.
• Factual findings of the Court of Appeals are conclusive — In a Rule 45 petition, only questions of law may be raised; factual findings of the CA are conclusive unless unsupported by or contrary to the evidence, or unless vital facts were ignored or misconstrued. Applied: petitioner failed to establish an exception.

• "Certiorari will issue only to correct errors of jurisdiction. It is not a remedy to correct errors of judgment." — States the distinction between errors of jurisdiction and errors of judgment, the basis for denying certiorari against the RTC’s interlocutory evidentiary order.
• "The admission of secondary evidence in lieu of the original copies predicated on proof of the offeror of the conditions sine qua non to the admission of the said evidence is a factual issue addressed to the sound discretion of the trial court." — Defines the standard of review for the admission of secondary evidence and explains why grave abuse of discretion was not shown.
• "The offeror of secondary evidence is burdened to prove the predicates thereof: (a) the loss or destruction of the original without bad faith on the part of the proponent/offeror which can be shown by circumstantial evidence of routine practices of destruction of documents; (b) the proponent must prove by a fair preponderance of evidence as to raise a reasonable inference of the loss or destruction of the original copy; and (c) it must be shown that a diligent and bona fide but unsuccessful search has been made for the document in the proper place or places." — Canonical formulation of the predicates for admitting secondary evidence.
• "With the admissions of the petitioner in his counter-affidavit, the prosecution even no longer needed to adduce evidence aliunde to prove the existence, due execution and the authenticity of the charge invoices and the checks." — Explains how the petitioner’s own admissions supplied proof of due execution and authenticity, satisfying a prerequisite for secondary evidence.

• People vs. Court of Appeals, G.R. No. 144332, June 10, 2004 — Cited for the requirements of a petition for certiorari or prohibition and the need to allege and demonstrate facts essential to the writ.
• People vs. Court of Appeals, 308 SCRA 687 (1999) — Cited for the rule that certiorari issues only to correct errors of jurisdiction, not errors of judgment.
• Johnson Lee vs. People, 393 SCRA 397 (2002) — Cited for the rule that certiorari will not correct errors of procedure or mistakes in findings and conclusions, and that interlocutory orders are generally not subject to certiorari; also for the principle that defenses must be presented at trial.
• Sanchez vs. Court of Appeals, 279 SCRA 647 (1997) — Cited for the requisites of certiorari, including that the writ is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions.
• Condo Suite Club Travel, Inc. vs. NLRC, 323 SCRA 679 (2000) — Cited for the definition of grave abuse of discretion as capricious, whimsical, arbitrary, or despotic exercise of judgment equivalent to lack of jurisdiction.
• Ley Construction & Development Corporation vs. Hyatt Industrial Manufacturing Corporation, 339 SCRA 223 (2000) — Cited for the rule that certiorari cannot co-exist with appeal or another adequate remedy.
• Toh vs. Court of Appeals, 344 SCRA 831 (2000) — Cited for the distinction between an error of judgment and an error of jurisdiction.
• Tensorex Industrial Corporation vs. Court of Appeals, 316 SCRA 471 (1999) — Cited for the rule that certiorari will not cure errors in the trial court’s appreciation of evidence.
• Nolan vs. Salas, 7 Phil. 1 (1906) — Cited for the requirement that the testimony of an eyewitness to the execution of a private document must be positive.
• Seiler vs. Lucas Films Ltd., 808 F.2d 1316 (1989) — Cited for the rationale of the Best Evidence Rule.
• United States vs. Gonzales-Benitez, 537 F.2d 1051 — Cited for the rule that the Best Evidence Rule does not apply to proof of collateral facts.
• United States vs. Balzano, 687 F.2d 6; Wright vs. Farmers Co-op, 681 F.2d 549 — Cited for the predicates for admitting secondary evidence, including loss or destruction and diligent search.

• Rule 65, Rules of Court — Governs certiorari; requires a tribunal exercising judicial or quasi-judicial functions, action without or in excess of jurisdiction or grave abuse of discretion, and no appeal or plain, speedy, and adequate remedy. Applied: petition improper because RTC acted within jurisdiction and appeal was available.
• Rule 45, Rules of Court — Provides for review on certiorari raising only questions of law. Applied: petitioner’s factual claims regarding loss, authenticity, and search were not reviewable.
• Rule 130, Section 3, Rules of Court — States the Best Evidence Rule and its exceptions, including loss or destruction of the original or inability to produce it without bad faith. Applied: the prosecution was required to prove an exception before the photocopies could be admitted.
• Rule 130, Section 5, Rules of Court — Allows contents of an unavailable original to be proved by a copy, recital in an authentic document, or testimony of witnesses, upon proof of execution or existence and unavailability without bad faith. Applied: the prosecution proved loss and due execution to justify the photocopies.
• Rule 132, Section 20, Rules of Court — Requires proof of due execution and authenticity of a private document offered as authentic by an eyewitness or evidence of genuineness of signature or handwriting; the adverse party’s admission is admissible. Applied: petitioner’s counter-affidavit admitted the authenticity and due execution of the charge invoices and checks.
• Rule 117, Section 3(a), Revised Rules of Criminal Procedure — Allows a motion to quash an information on the ground that the facts do not constitute an offense. Applied: petitioner had a plain remedy before trial, making the Rule 65 petition premature.
• Section 11, Corporation Code — Governs voluntary dissolution of corporations and SEC approval. Applied: the SEC approved NMI’s dissolution on March 1, 1988 subject to compliance with notice and publication requirements.

Puno, Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur; Chico-Nazario, J., was on leave.