Compania Maritima vs. Allied Free Workers Union, et al.

Facts: 1952, Compania Maritima (CM) and Allied (union) entered into a contract whereby the union agrees to perform arrastre (handling of cargo on the wharf) and stevedoring (handling of cargoes in the holds of vessels) work for the consignees of the cargoes of vessels, for a period of 1 month; CM has a right to revoke the contract if union failed to render proper service. Shippers and consigners paid the union for arrastre work, but refused to pay the stevedoring. CM refused to pay the stevedoring work also, because contract provides that it will be paid by the shippers and consignees. Union requested CM to recognize it as SEBA but CM refused; CM thru Teves (branch manager) terminated the contract; union filed charges of ULP. CM entered the same contract with another association; union picketed the wharf and prevented the new workers from performing their work; CM sued the union and its officers for the rescission of contract and to enjoin union from interfering with the loading/unloading of cargo and recovery of damages. Lower court ruled in CMs favor and awarded CM 450K as damages; it held that the officers of the union are solidarily liable for this amount. Union appealed. CM in its original complaint prayed that union and its officials be ordered to pay 450K actual damages, consisting of: 15K for failure to load/unload cargo; 50K for unions inefficiency in performing the work; 50K moral and exemplary damages; 178K+ and 62K+ for lost profit (due to unions obstruction). CM hired 2 auditors to ascertain the losses. Reports of the 2 accountants show that the aggregate amount of damage is 349K+. Issue: WON the evidence presented by CM warrants the award of damages in its favor Held: NO On the basis of the reports of the two accountants, the damages, claimed by the complaint as a matter of simple addition, does not reach the sum of P 450,000 fixed by the trial court. The damages, shown in the accountants' reports and in the statement made by the consignees, chief clerk (who did not testify) amount to P349,245.37 CM argues that the accountants' reports are admissible in evidence because of the rule that "when the original consists of numerous accounts or other documents which cannot be examined in court without great loss-of time and the fact sought to be established from them is the general result of the whole", the original writings need not be produced. SC held that:

o That rule cannot be applied in this case because the voluminous character of the records, on which the accountants' reports were based, was not duly established. o It is also a requisite for the application of the rule that the records and accounts should be made accessible to the adverse party so that the company may be tested on cross-examination. o What applies to this case is the general rule "that an audit made by, or the testimony of, a private auditor, is inadmissible in evidence as proof of the original records, books of accounts, reports or the like" o That general rule cannot be relaxed in this case because the company failed to make a preliminary showing as to the difficulty or impossibility attending the production of the records in court and their examination and analysis as evidence by the court A close scrutiny of the accountants' reports reveals their lack of probative value. o One of the accountant, Jayme, did not disclose the names of other "auditors" who assisted him in making the examination of the consignees records. o He gave the impression that he was an independent accountant hired by the company to make a "special investigation" when in truth he was a "personal friend" of Teves. o He stated that he attached to his report on the comparative statement of gross revenue a certificate of the captain of the vessel Panay showing the delays in its dismissal in Iligan City as indicated in its logbook. No such document was attached to Jayme's report. o It would not be proper to allow Jayme's estimates as recoverable damages. They are not supported by reliable evidence. The rule is that the auditor's summary should not include his conclusions or inferences. His opinion is not evidence. o Jayme allegedly based his computations on the records of the company which were not produced in court. o As to the other auditor Magante, he did not testify on his statement. Instead, accountant Jayme, substituting for Magante, testified on that statement. Jayme said that he verified the consignees records on which Magante based his statement. o Statement by branch manager Teves that union is liable for 38K+ as depreciation of forklifts, etc. used by union

>>SC: The best evidence on the cost of the said equipment would have been the sales invoices instead of the oral testimony of Teves. He did not produce the sales invoices. Records voluminous? NO, If the accountant Magante was able to summarize the contents of those records in two days, they could not have been very voluminous. They should have been offered in evidence.