Compania Maritima vs.

Allied Free Works Union

G.R. No. L-28999
May 24, 1977

Facts: On August 11, 1952, the Compañia Maritima and the Allied Free Workers Union entered into a written contract whereby the union agreed to perform
arrastre and stevedoring work for Compañia Maritima’s vessels at Iligan City. The contract was to be effective for one month. The company could revoke the
contract before its expiration if the union failed to render proper service, and it could be renewed by agreement of the parties. The company would also not be
liable for the payment of the services of the union 􀀀for the loading, unloading and delivery of cargoes, which should be paid for 􀀀by the owners and consignees
of the cargoes. The shippers and consignees paid the union only for the arrastre work (handling and hauling of cargo on the wharf or between the establishment
of the consignee or shipper and the ship’s tackle), but refused to pay for the stevedoring service (handling of the cargo in the holds of the vessel or between the
ship􀀀s tackle and the holds of the vessel). They claimed that the shipowner was the one obligated to pay for the stevedoring service because the bill of lading
provided that the unloading of the cargo was at the shipowner􀀀s expense. However, the company refused to pay for the stevedoring service on the basis of the
contract. As the union workers were in dire need of work, the contract was not terminated, and was verbally renewed upon its expiration.
The union requested recognition as the exclusive bargaining unit, but was denied. Hence, the union filed with the CIR a petition for certification. The company
terminated the contract and entered into a new stevedoring contract with Iligan Stevedoring Association. The union filed an Unfair Labor Practice suit and
picketed the wharf to prevent the Iligan Stevedoring from performing the arrastre and stevedoring work.

The company then sued the union, and the trial court awarded in favor of the company actual damages and other damages based on auditor􀀀s reports showing
alleged losses sustained by the company due to the acts of the union members. The union assailed the admissibility of said reports, alleging that they were
hearsay evidence.

Issue: Were the auditor’s reports admissible in evidence as proof of the original
records, books of accounts, reports or the like?

Held: No. The exception to the best evidence rule, which states 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 only the general result of the whole, the original writings need
not be produced, cannot be applied in this case. The voluminous character of
the records on which the accountant􀀀s reports were based was not duly established. Moreover, in order for said rule to be applied, the records and accounts
should be made accessible to the adverse party so that the correctness of the summary may be tested on cross-examination.

The general rule is 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. The company failed to show the difficulty or impossibility of producing the records in court and their examination and analysis as evidence by
the court.

Doctrine: The general rule is 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, unless it is proved that there would be difficulty or impossibility in producing the records in court and the examination and
analysis thereof.