Republic vs Mupas, 769 SCRA 384

Facts:

Asia’s Emerging Dragon Corp. (AEDC) submitted an unsolicited proposal to the Government – through the
Department of Transportation and Communications (DOTC) and the Manila International Airport
Authority (MIAA) – for the construction and development of the NAIA-IPT III under a build-operate-and-
transfer (BOT) arrangement.

On the other hand, Paircargo Consortium – composed of People’s Air Cargo and Warehousing Co., Inc.
(Paircargo), Philippine Air and Grounds Services, Inc. (PAGS), and Security Bank Corporation (Security
Bank) – submitted its competitive proposal to the Prequalification Bids and Awards Committee
(PBAC).Paircargo Consortium offered to pay the Government a total of P17.75 billion as guaranteed
payment for 27 years while AEDC offered to pay the Government a total of P135 million for the same period.
Hence, DOTC awarded the project to Paircargo Consortium (that later organized itself as PIATCO).
A Concession Agreement with PIATCO for the construction, development, and operation of the NAIA-IPT
III under a build-operate-transfer scheme was made to authorized PIATCO to build, operate, and
maintain the NAIA-IPT III during the concession period of twenty-five (25) years.

On March 31, 2000, PIATCO engaged the services of Takenaka and Asahikosan to aid in constructing
the project. However, PIATCO defaulted on its obligation to pay Takenaka and Asahikosan pursuant
to their respective contracts. Takenaka and Asahikosan agreed to defer PIATCO’s payments until June 2003.
In 2002, President Gloria Macapagal Arroyo declared in her speech that the Government would not honor
the PIATCO contracts. On the same day, Takenaka and Asahikosan notified PIATCO that they
were suspending the construction of the NAIA-IPT III for PIATCO’s failure to provide adequate
security. September 17, 2002, petitioners Demosthenes Agan, et al., asked the Court to nullify the PIATCO
contracts, and to prohibit the DOTC and the MIAA from implementing these contracts for being contrary to
law. The case, entitled Agan v. PIATCO, was docketed as G.R. No. 15500.

May 5, 2003, the Court nullified the PIATCO contracts after finding that Paircargo Consortium (that later
incorporated into PIATCO) was not a duly pre-qualified bidder for failure to meet the minimum equity
requirements for the NAIA-IPT III project.

Security Bank  (member of the Paircargo Consortium) invested its entire net worth in a single undertaking
or enterprise in gross violation of Section 21-B of the General Banking Act (which limits a commercial
bank’s equity investment, whether allied or non-allied, to fifteen percent (15%) of its net worth).

PIATCO contracts contained provisions that substantially departed from the draft Concession
Agreement

December 21, 2004, the Government filed a complaint for expropriation of the NAIA-IPT III before the
RTC of Pasay, Branch 11

RTC issued a writ of possession in favor of the Government. Citing City of Manila v. Serrano,23 the RTC
held that that it had the ministerial duty to issue a writ of possession upon: (1) the filing of the complaint for
expropriation sufficient in form and substance, and (2) the Government’s deposit of the amount equivalent
to the property’s assessed value, pursuant to Rule 67 of the Rules of Court

January 4, 2005, the RTC modified its December 21, 2004 order and directed: (1) the Land Bank to
immediately release to PIATCO the amount of US$62,343,175.77 25  that would be deducted from the just
cralawred

compensation; (2) the Government to submit to the RTC a Certificate of Availability of Funds for the
payment of just compensation; and (3) the Government to maintain and preserve the NAIA-IPT III pending
the expropriation proceedings and the full payment of just compensation. The RTC likewise prohibited the
Government from performing acts of ownership over the NAIA-IPT III such as awarding concessions or
leasing any part of the NAIA-IPT III to other parties

RTC appointed three Commissioners28 to determine just compensation without consulting the
Government and PIATCO
Republic v. Gingoyon Case, G.R. No. 166429 

Government, et al., filed a petition for certiorari with the Court assailing the validity of the January 4, 7,
and 10, 2005 orders of the RTC in the expropriation case

, the Court did not recognize the London awards in favor of Takenaka and Asahikosan. Under Section 48,
Rule 39 of the Rules of Court, a foreign judgment would not bind Philippine courts unless the judgment is
recognized and enforced in this jurisdiction. Philippine courts may annul a foreign judgment for lack of
jurisdiction, lack of notice to the party, collusion, fraud, clear mistake of law or fact, or when the foreign
judgment is contrary to public policy

PIATCO, as builder of the NAIA-IPT III, must first receive just compensation in accordance with
law and equity before the Government may take over the NAIA-IPT

Government should not pay for the portions of the NAIA-IPT III that were defective – as per rtc

 (a) failed structural elements in the NAIA-IPT III;

(b) inferior quality of material works;
(c) constructed areas that are unnecessary to the use of an international airport terminal;
(d) cost of seismic and gravity load structural retrofits for the failed elements;
(e) cost of completing the items listed in the JAC project status summary report of February 28,
2003; and
(f) cost of seismic and gravity load structural retrofits for the failed elements in the elevated
roadway structures.

RTC stated that just compensation is limited to the value of the improvement at the time of the filing of the
expropriation complaint. The payment of just compensation does not include the right to be compensated of
the franchise to operate the airport, and the increased value of improvements due to inflation rate.

PIATCO, Takenaka, and Asahikosan sought to nullify the RTC decision for alleged violation of their right to
due process. They complained that they were only furnished copies of the BOC Final Report only after the
promulgation of the May 23, 2011 decision. 103 They averred that the RTC violated Sections 7 and 8, Rule 67
of the Rules of Court which provide that the clerk of court shall serve copies of the commissioners’ report on
all interested parties, with notice that they be allowed ten days within which to file objections to the findings
of the report, if they so desire

the offer to pay through an escrow account is not equivalent to direct payment. PIATCO further denied the
Government’s allegations that there were several claimants on the just compensation

RTC ruled that it has residual jurisdiction to adjudicate the Government’s Manifestation and Motion
considering that the motion was filed prior to the parties’ filing of the Notice of Appeal. The RTC opined that
the Manifestation and Motion was akin to a motion for execution pending appeal. The Manifestation and
Motion showed the Government’s intent to voluntarily comply with the May 23, 2011 decision which was
pending appeal before the CA. Under Section 9, Rule 41 of the Rules of Court, the RTC has the residual
power to issue orders for the protection and preservation of the parties’ rights, and to order the execution of
a decision pending appeal. Furthermore, Section 6, Rule 136 of the Rules of Court provides that courts have
incidental power to issue orders that are necessary to effectuate their judgments.

The CA Rulings
CA upheld the validity of the RTC’s May 23, 2011 decision. The CA ruled that the parties did not need to be
furnished the BOC Final Report since RA 8974 is silent on the appointment of the BOC, as held in Gingoyon.
However, the CA modified the RTC rulings and arrived at its own formula of the NAIA-IPT III’s replacement
cost

The CA likewise observed that PIATCO’s summarized computation of attendant costs was self-serving and
unsubstantiated by relevant evidence.

CA further ordered Takenaka and Asahikosan to share in the expenses of the BOC. Since Takenaka and
Asahikosan’s inputs on the construction costs of the NAIA-IPT III were heard by the RTC, they should share
in the expenses of the BOC.

Upon finality of judgment, interest on the sum due by then shall be at  6% per annum until fully
paid pursuant to BSP Circular No. 799, series of 2013 which took effect on 01 July 2013, and
which effectively modified the interest rate rulings in Eastern Shipping Lines, Inc. v. Court of
Appeals. Eastern Shipping was the basis of the Court’s earlier imposition of a 12% interest from
finality of judgment.

The Action to Enforce the London Awards, Civil Case No. 06-171 

In a decision dated September 6, 2010, the RTC recognized the validity of the London awards in Claim
Nos. HT-04-248 and HT-05-269 and declared these awards as enforceable in the Philippine jurisdiction. The
RTC thus ordered PIATCO to pay Takenaka and Asahikosan the sum of $85.7 million. 124 cralawrednad

G.R. No. 209917 is the Government’s petition for review on certiorari128 to partially reverse the CA’s August
22, 2013 Amended Decision129 and its October 29, 2013 Resolution130 in CA-G.R. CV No. 98029.

G.R. No. 209696 is a petition for review on certiorari filed by Takenaka and Asahikosan to partially reverse
the CA’s August 22, 2013 Amended Decision and its October 29, 2013 Resolution in CA-G.R. CV No.
98029.131cralawrednad

G.R. No. 209731 is PIATCO’s petition for review on certiorari to reverse the CA’s August 22, 2013 Amended
Decision, and October 29, 2013 Resolution in CA-G.R. CV No. 98029. 132 cralawrednad

G.R. Nos. 209917, 209696 & 209731 originally arose from the Government’s complaint for expropriation of
the NAIA-IPT III filed with the RTC of Pasay, Branch 117 in Civil Case No. 04-0876. The main issue before
the Court in these petitions is the valuation of the just compensation due for the Government’s
expropriation of the NAIA-IPT III.

G.R. No. 181892 is the Government’s petition for certiorari  with prayer for the issuance of a temporary
restraining order,133 assailing the May 3, 2007, May 18, 2008; and January 7, 2008 orders of the RTC of
Pasay City, Branch 117 in Civil Case No. 04-0876.134cralawrednad

This petition likewise arose from the Government’s complaint for expropriation of the NAIA-IPT III. The main
issue in this petition is the propriety of the appointment of DG Jones and Partners as an independent
appraiser of the NAIA-IPT III.

G.R. No. 202166 is PIATCO’s petition for review on certiorari135 to assail the CA’s March 13, 2012
decision136 and May 31, 2012 Resolution137 in CA-G.R. CV No. 96502. The petition arose from Takenaka and
Asahikosan’s action to enforce the London awards before the RTC of Makati, Branch 143 in Civil Case No.
06-171. As previously mentioned, this case was not consolidated with the four (4) cases above and shall
thus be separately ruled upon by the Court.

The Government’s Position (G.R. Nos. 209917, 209731, and 209696)

partially reverse the CA rulings and to deduct from the replacement cost of US$300,206,693.00 the
following items: (a) depreciation in the amount of US$36,814,612.00; and (b) PIATCO’s non-
compliance with contract specifications in the amount of US$113,944,044.0
Whether the Government may take property for public purpose or public use
upon the issuance and the effectivity of the writ of possession
Held:
The parties were afforded procedural 
due process despite their non-receipt 
of the BOC Final Report prior to 
the promulgation of the RTC’s 
May 23, 2011 Decision.

Rule 67 of the Rules of Court provides that the clerk of court shall serve copies of the commissioners’ final
report on all interested parties upon the filing of the report. Each party shall have ten days within which to
file their objections to the report’s findings

Upon the expiration of the ten-day period or after all the parties have filed their objections and after
hearing, the trial court may: (a) accept the report and render judgment in accordance therewith; (b) for
cause shown, recommit the report to the commissioners for further report of facts; (c) set aside the report
and appoint new commissioners; (d) partially accept the report; and (e) make such order or render such
judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation;
and to the defendant, the just compensation for the property so taken.

We rule that the parties’ failure to receive the Final Report did not render the May 23, 2011
Decision null and void.

The essence of procedural due process is the right to be heard.172 The procedural due process
requirements in an eminent domain case are satisfied if the parties are given the opportunity to present
their evidence before the commissioners whose findings (together with the pleadings, evidence of the
parties, and the entire record of the case) are reviewed and considered by the expropriation court. It is the
parties’ total failure to present evidence on just compensation that renders the trial court’s ruling void. The
opportunity to present evidence during the trial remains to be the vital requirement in the observance of due
process

The mere failure of the RTC’s clerk of court to send the parties copies of the BOC Final Report is not
substantial enough under the attendant circumstances to affect and nullify the whole proceedings. Litigation
is not a game of technicalities

The power of eminent domain is 

a fundamental state power that is
inseparable from sovereignty.Eminent domain is a fundamental state power that is inseparable from
sovereignty. It is the power of a sovereign state to appropriate private property within its territorial
sovereignty to promote public welfare. The exercise of this power is based on the State’s primary duty to
serve the common need and advance the general welfare. 174 It is an inherent power and is not conferred by
the Constitution.175 It is inalienable and no legislative act or agreement can serve to abrogate the power of
eminent domain when public necessity and convenience require its exercise. 176
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The decision to exercise the power of eminent domain rests with the legislature which has the exclusive
power to prescribe how and by whom the power of eminent domain is to be exercised. Thus, the Executive
Department cannot condemn properties for its own use without direct authority from the Congress.

Just compensation is the full and 

fair equivalent of the property taken from the
owner by the condemnor.
In cases where the fair market value of the property is difficult to ascertain, the court may use
other just and equitable market methods of valuation in order to estimate the fair market value
of a property

The Court cannot consider

the additional evidence submitted by Takenaka
and Asahikosan before the Court of Appeals

At the outset, we rule that we cannot consider Takenaka and Asahikosan’s attachments in their (1) Motion
for Submission of Additional Documents dated July 30, 2013; 260 (2) Supplemental Motion for Submission of
Additional Documents dated October 3, 2012;261 and (3) Second Supplemental Motion for Submission of
Additional Documents dated April 11, 2013 in CA G.R. No. CV-98029. 262 These attachments sought to refute
the Government’s position that the NAIA-IPT III suffered from massive structural defects.

Takenaka and Asahikosan posit that they could have submitted reports before the trial court to show that
the design of the NAIA-IPT III was structurally sound if the RTC had only furnished the parties copies of the
BOC Final Report and afforded them the opportunity to file a Comment on the Final Report.

Under Section 3, Rule 6 of the Internal Rules of the CA, the CA may receive evidence in the following
cases:ChanRoblesvirtualLawlibrary

(a) In actions falling within its original jurisdiction, such as (1) certiorari, prohibition and mandamus, (2)
annulment of judgment or final order, (3) quo warranto, (4) habeas corpus, (5) amparo, (6) habeas data,
(7) anti-money laundering, and (8) application for judicial authorization under the Human Security Act of
2007;

(b) In appeals in civil cases where the Court grants a new trial on the ground of newly
discovered evidence, pursuant to Sec. 12, Rule 53 of the Rules of Court;

(c) In appeals in criminal cases where the Court grants a new trial on the ground of newly discovered
evidence, pursuant to Sec. 12, Rule 124 of the rules of Court; and

(d) In appeals involving claims for damages arising from provisional remedies. (Emphasis supplied)

This provision qualifies the CA’s power to receive evidence in the exercise of its original and appellate
jurisdiction under Section 9 of BP 129, as amended: ChanRoblesvirtualLawlibrary

Sec. 9. Jurisdiction. — The Court of Appeals shall exercise: ChanRoblesvirtualLawlibrary

xxxx

The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence, and perform
any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate
jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or hearings in
the Court of Appeals must be continuous and must be completed within three (3) months, unless extended
by the Chief Justice.

Since Takenaka and Asahikosan filed an ordinary appeal pursuant to Rule 41 in relation to Rule 44 of the
Rules of Court, the CA could only have admitted newly discovered evidence. Contrary to Takenaka and
Asahikosan’s claim, the attachments to the motions are not newly discovered evidence. Newly discovered
evidence is evidence that could not, with reasonable diligence, have been discovered and produced at the
trial, and which, if presented, would probably alter the result. 263 cralawrednad

We find it hard to believe that Takenaka and Asahikosan could only have possibly secured the attachments
after the trial court had rendered its decision. With the exercise of reasonable diligence, Takenaka and
Asahikosan could have produced these documents before the BOC since they were fully aware that the
Government presented evidence on the alleged structural defects of the NAIA-IPT III.
Equiponderance of evidence on 
the alleged structural defects of the NAIA-IPT
III favors PIATCO, Takenaka and Asahikosan.

Nonetheless, even without considering and/or giving probative value to the additional evidence presented by
Takenaka and Asahikosan before the CA, this Court finds that the Government failed to establish by
preponderance of evidence that the NAIA-IPT III suffered from structural defects.

Under Section 3, Rule 131 of the Rules of Court, it is presumed that a person is innocent of wrong; 265 that a
person takes ordinary care of his concerns; 266that private transactions have been fair and regular; 267 and
that the ordinary course of business has been followed. 268cralawrednad

Based on these presumptions, we presume that Takenaka and Asahikosan built the NAIA-IPT III in
accordance with the specifications required under the Onshore Construction Contract and Offshore
Procurement Contract. We also presume that the NAIA-IPT III is structurally sound and compliant with the
applicable building codes and other laws at the time it was designed and built.

However, these presumptions are merely disputable presumptions and may be overcome by

contradicting evidence. The burden of proof lies with the Government to prove by preponderance of
evidence that the NAIA-IPT III suffered from structural defects. “Preponderance of evidence” is the weight,
credit, and value of the aggregate evidence on either side and is usually considered to be synonymous with
the term “greater weight of evidence” or “greater weight of credible evidence.” 269 cralawrednad

In determining where the preponderance of evidence or superior weight of evidence on the issues involved
lies, the court may consider all the facts and circumstances of the case, the witness’ manner of testifying,
their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature
of the facts to which they testify, the probability of their testimony, their interest or want of interest, and
also their personal credibility in so far as the same may legitimately appear during trial. The court may also
consider the number of witnesses, although preponderance does not necessarily lie with the greater
number.270 cralawrednad

The Government’s burden of proof to show that the NAIA-IPT III is indeed defective does not shift to its
adverse parties. The burden of proof remains throughout the trial with the party upon whom it is imposed.

It is the burden of evidence that shifts from party to party during trial. 271 This means that the burden of
going forward with the evidence is met by the countervailing evidence of PIATCO, Takenaka and Asahikosan
which, in turn, balances the evidence introduced by the Government. Thereafter, the burden of evidence
shifts back to the Government.

In the present case, the experts and consultants of the Government, PIATCO, Takenaka and Asahikosa
arrived at conflicting findings regarding the structural integrity of the NAIA-IPT III. The Government’s
experts detailed with particularity the alleged defects of the NAIA-IPT III, which allegations the experts of
PIATCO, Takenaka and Asahikosan refuted with particularity.

Under the equiponderance of evidence rule, when the scale of justice shall stand on equipoise and nothing in
the evidence inclines a conclusion to one side or the other, the court will find for the defendant.  272 cralawrednad

If the facts and circumstances are capable of two or more explanations, one of which is consistent with the
allegations of the plaintiff and the other consistent with the defense of the defendant, the evidence does not
fulfill the requirement of preponderance of evidence. When the evidence of the parties is in equipoise, or
when there is a doubt as to where the preponderance of evidence lies, the party with the burden of proof
fails. 273
cralawrednad

The reason for this rule is that the plaintiff must rely on the strength of his evidence and not on the
weakness of the defendant's claim. Thus, even if the evidence of the plaintiff may be stronger than that of
the defendant, there is no preponderance of evidence on his side when this evidence is insufficient in itself
to establish his cause of action.274 cralawrednad
In the present case, PIATCO, Takenaka and Asahikosan, met the Government’s allegations
regarding the structural integrity of the NAIA-IPT III.

A reading of the reports of the parties’ respective experts shows that each party presented an equally
persuasive case regarding the structural soundness or defect of the NAIA-IPT III. The Government’s case on
the alleged structural defect of the NAIA-IPT III has been met by equally persuasive refutations by the
experts of PIATCO, Takenaka and Asahikosan.

As a matter of law and evidence, the Government’s case regarding this matter must fail. Since PIATCO,
Takenaka and Asahikosan presented equally relevant and sufficient countervailing evidence on the structural
soundness of the NAIA-IPT III, the scales of justice tilt in their favor. Neither party successfully established a
case by preponderance of evidence in its favor; neither side was able to establish its cause of action and
prevail with the evidence it had. As a consequence, we can only leave them as they are. 275 cralawrednad

PIATCO’s attendant costs

Under the best evidence rule, when the subject of inquiry relates to the contents of a document, no
evidence shall be admissible other than the original document itself. In proving the terms of a written
document, the original of the document must be produced in court.

The best evidence rule ensures that the exact contents of a document are brought before the court. In
deeds, wills, and contracts, a slight variation in words may mean a great difference in the rights and
obligations of the parties. A substantial hazard of inaccuracy exists in the human process of making a copy
by handwriting or typewriting. Moreover, with respect to oral testimony purporting to give the terms of a
document from memory, a special risk of error is present, greater than in the case of attempts at describing
other situations generally. 286
cralawrednad

The best evidence rule likewise acts as an insurance against fraud. If a party is in the possession of the best
evidence and withholds it, and seeks to substitute inferior evidence in its place, the presumption naturally
arises that the better evidence is withheld for fraudulent purposes that its production would expose and
defeat. The rule likewise protects against misleading inferences resulting from the intentional or
unintentional introduction of selected portions of a larger set of writings. 287 cralawrednad

As exceptions to the best evidence rule, Section 3, Rule 130 of the Rules of Court provides that non-
original documents may be produced in court in the following cases: ChanRoblesvirtualLawlibrary

(a)When the original has been lost or destroyed, or cannot be produced in

court, without bad faith on the part of the offeror;
(b When the original is in the custody or under control of the party against
) whom the evidence is offered, and the latter fails to produce it after
reasonable notice;
(c) 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; and
(d When the original is a public record in the custody of a public officer or is
) recorded in a public office. (Emphasis supplied)
Secondary evidence of the contents of writings is admitted on the theory that the original cannot be
produced by the party who offers the evidence within a reasonable time by the exercise of reasonable
diligence.288
cralawrednad

PIATCO argues that its non-submission of original documents before the trial court is justified under Section
3 (c), Rule 130 of the Rules of Court. It points out that a party need not submit the original when it 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. PIATCO insists that the
lower courts erred in not giving probative value to the report prepared by Reyes Tacandong & Co., an
auditing firm, validating PIATCO’s computation of attendant costs. Significantly, Reyes Tacandong & Co.
failed to state that it examined the original documents in validating PIATCO’s computation of
attendant costs.

We agree with PIATCO that it need not submit numerous and voluminous invoices, official receipts, and
other relevant documents before the trial court to prove the attendant costs that it incurred in the
construction of the NAIA-IPT III. The trial court may admit a summary of voluminous original
documents, in lieu of original documents, if the party has shown that the underlying writings are numerous
and that an in-court examination of these documents would be inconvenient. In other words, Section 3
(c), Rule 130 of the Rules of Court does away with the item-by-item court identification and
authentication of voluminous exhibits which would only be burdensome and tedious for the
parties and the court.

However, as a condition precedent to the admission of a summary of numerous documents, the

proponent must lay a proper foundation for the admission of the original documents on which
the summary is based. The proponent must prove that the source documents being summarized are also
admissible if presented in court.289
cralawrednad

In concrete terms, the source documents must be shown to be original, and not secondary.
Furthermore, the source documents must likewise be accessible to the opposing party so that the
correctness of the summary of the voluminous records may be tested on cross-examination and/or may be
refuted in pleadings. In ordinary trial-type proceedings, a proper foundation for the introduction of a
summary may be established through the “testimony of the person who is responsible for the summary's
preparation, or the person who supervised the preparation of the summary.” 290 cralawrednad

The primary reason for these procedural foundations is that the summary of numerous documents is, in
strict terms, hearsay evidence. The trial court should not haphazardly allow a party to present a summary
of numerous documents and immediately admit and give probative value to such summary without
sufficiently laying these foundations. If the source documents of the summary are non-original, the trial
court would commit a grave error in admitting and/or giving probative value to the summary of non-original
documents; the evidence admitted would be double hearsay.291 cralawrednad

Furthermore, when a party invokes Section 3 (c), Rule 130 of the Rules of Court, he does not similarly
invoke Section 3 (a), (b), and/or (d), Rule 130 of the Rules of Court. He does not likewise claim that the
original documents have been lost or destroyed. The party merely asserts that the numerous documents
cannot be examined in court without great loss of time and that the fact sought to be established from these
documents is only the general result of the whole.

Whenever a party seeks an exemption under the best evidence rule pursuant to Section 3 (c), Rule 130 of
the Rules of Court, he asks permission from the trial court to produce a summary of numerous
documents, whose originals are available to the adverse party for inspection. He does not ask
permission from the trial court to present in evidence the numerous non-original documents.
Otherwise, the very purpose of Section 3 (c), Rule 130 of the Rules of Court would be defeated. In that
case, every exhibit of non-original documents would be identified, authenticated, and cross-examined,
leading to a tedious and protracted litigation.

Thus, if a party desires to present photocopies of the original documents, he must first establish
that the presentation of photocopies is justified under Section 3 (a), (b), and/or (d), Rule 130 of
the Rules of Court. He must establish the presence of all the elements under these provisions.

In the case of lost or destroyed documents, the offeror of non-original documents must first prove the
following elements before secondary evidence is admitted before the court: (a) the existence or due
execution of the original; (b) the loss and destruction of the original, or the reason for its non-production in
court; and (c) the absence of bad faith on the part of the offeror to which the unavailability of the original
can be attributed. To conclude otherwise is to allow the party to circumvent the best evidence rule and the
requirements under Section 3 (a), (b), and (d), Rule 130 of the Rules of Court by merely invoking Section 3
(c), Rule 130 of the Rules of Court.

In the present case, PIATCO attached to its Compliance dated December 14, 2010, the photocopies of
numerous documents, and the validation of PIATCO’s computation of attendant costs prepared by Reyes
Tacandong & Co., among others. PIATCO justifies the non-presentment of original documents pursuant
to Section 3 (c), Rule 130 of the Rules of Court.

We affirm the lower courts’ uniform findings that PIATCO failed to establish its attendant
costs. PIATCO failed to establish that the photocopied documents fall under Section 3 (a), (b), and/or (d),
Rule 130 of the Rules of Court. These photocopied documents are hearsay evidence. They are mere scraps
of paper and have no weight as basis for the attendant costs of the NAIA-IPT III.

We likewise cannot give weight to the summary prepared by Reyes Tacandong & Co. for being
double hearsay. Reyes Tacandong & Co., whose letter was addressed to PIATCO and not to the trial court,
did not state in its report that it examined the original documents allegedly proving attendant costs.
Moreover, in a letter dated December 14, 2010, Reyes Tacandong & Co stated it does not “express any
assurance on the attendant costs:”

We have performed the procedures agreed with Philippine International Air Terminals, Co., (“the Company”)
with respect to the Company’s attendant costs incurred in building NAIA Terminal 3 from 1997 to 2004. Our
engagement was undertaken in accordance with the Philippine Standard on Related Services applicable to
agreed-upon procedures engagements.

xxxx

The sufficiency of the procedures is solely the responsibility of the specified users of the report.
Consequently, we make no representation regarding the sufficiency of the procedures either for the purpose
for which this report has been requested or for any other purpose.

Because the procedures do not constitute either an audit or a review of financial statements made in
accordance with Philippine Standards on Auditing, we do not express any assurance on the attendant
costs. (Emphasis supplied)