Villarey Transit v. Ferrer G.R. No.

L-23893 Oct 29 1968

Facts: Jose Villarama, the operator of the Villa Rey Transit bus company pursuant to certificates of public
convenience (CPC) granted to him by the Public Service Commission, sold two of the CPCs to the Pangasinan
Transportation Company (Pantranco), with the condition that Villarama shall not, for 10 years, apply for any TPU
service identical or competing with the buyer. Three months later, the Villa Rey Transit Inc. (VRTI) was formed,
with Villarama’s wife and relatives as stockholders and incorporators. VRTI bought 5 CPCs from Valentin Fernando,
two of which was levied pursuant to a writ of execution in favor of Eusebio Ferrer, a creditor of Fernando. The
CPCs were sold at auction, of which Ferrer was the highest bidder. Ferrer then sold the CPCs to Pantranco. VRTI
filed a complaint for annulment of the sheriff’s sale in favor of Ferrer and the subsequent sale of the CPCs to
Pantranco. Pantranco, on its part, alleged that Jose Villarama and VRTI were one and the same; hence, the non-
competition clause in the abovementioned deed of sale executed by Villarama is also binding to VRTI. As evidence,
Pantranco presented photostatic copies of ledger entries and vouchers, the admissibility of which was assailed by
Villarama on the ground that the best evidence were the originals themselves.

Issue: Were the photostatic copies of the ledger entries and vouchers of VRTI sufficient to prove Pantranco’s
allegations, and thereby are admissible as evidence?

Held: Yes. The photostatic copies of the ledger entries and vouchers showing that Villarama had co-mingled his
personal funds and transactions with those made in the name of VRTI are very illuminating evidence. The
requisites for the admissibility of secondary evidence when the original is in the custody of the adverse party are:
a) the adverse party’s possession of the original; b) reasonable notice to the adverse party to produce the same; c)
satisfactory proof of its existence; and d) the failure or refusal of the adverse party to produce the original in court.

Villarama himself admitted the previous existence of the files of VRTI. He said that the originals were missing and
that VRTI was no longer in possession of the same. However, it is not necessary for a party seeking to introduce
secondary evidence o show that the original is in the actual possession of the adversary. It is enough that
circumstances show that the writing is in his possession or under his control. It is also not required that the party
entitled to the custody of the instrument, upon notice to produce it, admit having it in his possession. The party
seeking its production may introduce a copy thereof as in the case of loss because among the exceptions to the
best evidence rule is “when the original has been lost, destroyed or cannot be produced in court.” The original of
the vourchers in this case must be deemed to have been lost, thus, secondary evidence are admissible.

Doctrine: The requisites for the admissibility of secondary evidence when the original is in the custody of the
adverse party are: a) the adverse party’s possession of the original; b) reasonable notice to the adverse party to
produce the same; c) satisfactory proof of its existence; and d) the failure or refusal of the adverse party to
produce the original in court. However, it is not necessary for a party seeking to introduce secondary evidence o
show that the original is in the actual possession of the adversary. Neither is it required that the party entitled to
the custody of the instrument, upon notice to produce it, admit having it in his possession.