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KUWAIT AIRWAYS CORPORATION, Petitioner v. THE TOKIO MARINE AND FIRE INSURANCE CO., LTD., and TOKIO MARINE MALAYAN INSURANCE CO., INC., Respondents; G.R. No. 213931; 17 November 2021

Under the Original Document Rule, when the subject of inquiry is the contents of a document, writing, photograph or other record, no evidence is admissible other than the original document itself.

KUWAIT AIRWAYS v. TOKIO MARINE AND FIRE INSURANCE; G.R. No. 213931

Facts:

Petitioner Kuwait Airways Corporation (KAC) is a foreign corporation licensed in the Philippines to engage in the business of air transportation and as such, operates several aircraft as common carriers to and from the Philippines in international trade.  Meanwhile, O’Grady Air Services (OAS) is a foreign entity based in the United Kingdom (UK) and licensed in the Philippines to engage in the business of freight forwarding or transportation of cargo, as a common carrier, to and from Philippine ports through a local agent.

Respondent Tokio Marine and Fire Insurance Co., Ltd. (TMFICL) is an insurance company based in Tokyo, Japan. On the other hand, Tokio Marine Malayan Insurance Co., Inc. (TMMICI), a domestic insurance corporation based in Makati City. According to TMMICI’s claims manager, it is an affiliate of TMFICL and acts as the latter’s settling agent when claims are made on its insurance policies.

On January 6, 2003, Fujitsu Europe Limited (FEL) engaged the services of OAS for the transport of 10 pallets containing crates of STC disk drives from FEL’s address in Slough, Berkshire, UK.  to Fujitsu Computer Products Corporation of the Philippines (FCPCP), the consignee, at the latter’s address in Carmelray Industrial Park, Laguna.  From Slough, the pallets were taken to Heathrow Airport in London, where they were then loaded onto KAC’s aircraft on flights no. KU104/08 and KU411/09. The shipment had a declared value of US$15 8,163.00 and was insured with TMFICL under Open Policy No. 01Ql 1368N.

On January 9, 2003, the shipment arrived at the Ninoy Aquino International Airport (NAIA).  According to a photocopy of MIASCOR Storage and Delivery Receipt No. 251294 dated January 10, 2003, it was noted that one crate had a hole on the side and another was dented.

In a letter dated February 28, 2003, FCPCP’s on-site supevisor at NAIA notified petitioner that they are making a preliminary claim. The cargo was then transported by Japan Cargo Forwarder and Brokerage Corporation (Japan Cargo) to Laguna and were received by FCPCP on January 18, 2003.

FCPCP filed a claim on the insurance policy. TMMICI then hired the services of Toplis Marine Philippines, Inc. (Toplis) to survey the alleged damage. On January 27, 2003 – 18 days after the goods had arrived at NAIA – Toplis sent one of its registered marine and cargo surveyors, Henry F. Barcena, to FCPCP’s premises in Laguna to conduct a survey on the goods. Barcena was shown 32 cartons which he noted to be “deformed/pressed in varying degrees” and was given photocopies of the MIASCOR Storage and Delivery Receipt and the Japan Cargo Delivery Receipt.

In a letter addressed to KAC and dated February 8, 2003, FCPCP formally claimed for US$55,602.00 for the damage sustained by the shipment. This claim was not acted upon, so FCPCP claimed for insurance. Based on the Certificate of Survey, respondent TMMICI paid FCPCP the insurance benefit.  In a Subrogation Receipt dated September 22, 2003, FCPCP acknowledged receipt of US$61,400.70 as insurance indemnity and transferred all its rights and interest on the damaged cargo to respondent TMFICL.

 On January 6, 2005, respondents filed a complaint  before the RTC against OAS, OAS’ unknown local agent, and KAC for US$61,400.70 as actual damages with six percent (6%) legal interest from date of demand, attorney’s fees, and costs of suit.

Ruling of the Regional Trial Court

The RTC held that respondents had failed to discharge their burden of proof, opining that the respondents relied too heavily on the photocopies of the MIASCOR Storage and Delivery Receipt. RTC also pointed out that the receipts were not authenticated as required by Section 5, Rule 130. Respondents’ witnesses did not personally witness the preparation and execution of said receipt nor could they identify the signatures therein. As such, the RTC found no probative value in the receipts. Furthermore, the RTC gave little credence to Barcena’s testimony because he inspected the goods 18 days after it had arrived at the consignee’s premises.

Ruling of the Court of Appeals

The CA reversed the RTC.

In the CA’s appreciation of the evidence, the cargo was in good condition when it was loaded aboard petitioners’ aircraft but already damaged when unloaded.

In direct contradiction to the RTC’s observations, the CA held that the MIASCOR Storage and Delivery Receipt and the Japan Cargo Delivery Receipt indubitably proved the damage. 

Issue:

Whether the MIASCOR Storage and Delivery Receipt and the Japan Cargo Delivery Receipt are adequate proof of damage to the goods.

Ruling:

No.

Original Document Rule

Under the Original Document Rule (previously called the Best Evidence Rule), when the subject of inquiry is the contents of a document, writing, photograph or other record, no evidence is admissible other than the original document itself.

 In this case, respondents formally offered the MIASCOR Storage and Delivery Receipt and the Japan Cargo Delivery Receipt as proof of their respective contents. As such, the originals should have been presented at trial.

Under Section 4, Rule 130 of the 2019 Rules, however, an original document may consist of a “duplicate” produced by means of photography, mechanical or electronic re-recording, or by other equivalent techniques which accurately reproduce the original. A photocopy of an original, therefore, may consist of a “duplicate” if there is no question that it is an accurate reproduction of the original. But even though this case was tried before the effectivity of the 2019 Rules on Evidence, petitioner had already objected to the admissibility of the MIASCOR Delivery Receipt No. 251294 and Japan Cargo Delivery Receipt No. 124108, arguing that they are secondary evidence because they are mere photocopies.

Under Section 5 of Rule 130, a party is allowed to submit secondary evidence to prove the contents of a lost or destroyed document by a copy, a recital of its contents in some authentic document, or the testimony of witnesses, provided that the offeror of the secondary evidence proves: ( 1) that the original existed and duly executed; (2) it was lost or destroyed; and (3) its unavailability is not due to bad faith on his or her part.

That said, regardless of whether an exhibit is an original, a “duplicate” of a document, or secondary evidence, it must still be presented at trial in the manner provided for by the Rules on Evidence before it can be admitted into evidence. For such purposes, it is important to distinguish between public or private documents. Public documents are admissible in evidence without further proof of their due execution and genuineness.  On the other hand, under Section 20 of Rule 132, a private document cannot be admitted into evidence unless its due execution and authenticity is proven by: (a) anyone who saw the document executed or written; (b) evidence of the genuineness of the handwriting of the maker; or ( c) other evidence showing its due execution and authenticity.

Upon a review of the records, We agree with the RTC’s finding that the MIASCOR Delivery Receipt No. 251294 and Japan Cargo Delivery Receipt No. 124108 were not authenticated as required by Section 20 of Rule 132. Not one of respondents’ three witnesses testified that they saw the receipts – and importantly, the notations of damage – being executed or written.

 As such, the photocopies of said receipts are inadmissible and have no evidentiary value.