In a construction dispute, the Supreme Court has reiterated the importance of properly authenticating private documents before they can be admitted as evidence in court. The Court emphasized that an “accomplishment billing,” which details work completed and expenses incurred, is considered a private document. As such, it requires proper authentication to be given probative value. This ruling underscores the burden on plaintiffs to substantiate their claims with credible, admissible evidence, like receipts or payrolls, not just self-serving documents. The decision clarifies the application of evidentiary rules in construction disputes and highlights the necessity for parties to meticulously document and authenticate their claims.

Building Blocks or Paper Tigers?: Examining Proof in Construction Claims

This case, Young Builders Corporation v. Benson Industries, Inc., revolves around a collection suit filed by Young Builders Corporation (YBC) against Benson Industries, Inc. (BII) for alleged unpaid balances from a construction project. The core issue before the Supreme Court was whether YBC presented sufficient and admissible evidence to prove its monetary claims against BII. The case underscores the critical importance of adhering to the rules of evidence, particularly the authentication of private documents, in construction disputes.

The factual backdrop involves a construction project initiated in 1994. YBC claimed that BII contracted them to construct a commercial building on an accomplishment billing basis. As of May 18, 1998, YBC asserted that it had completed work amounting to Php54,022,551.39, but BII had only paid Php40,678,430.00, leaving a balance of Php13,344,121.39. Additionally, YBC claimed Php11,839,110.99 for extra works. BII, however, denied that the construction was on an accomplishment billing basis and countered that YBC had failed to comply with the agreed timetable, committed breaches in the agreement, and performed substandard work. This disagreement over the payment terms and the quality of work led to the legal battle, highlighting the critical role of evidence in proving or disproving claims.

To support its monetary claims, YBC presented several documents, including a revised cost proposal, a cost breakdown for additional works, and an accomplishment billing. The accomplishment billing, which served as the cornerstone of YBC’s claim, detailed the alleged progress of the work done and the expenses incurred. However, the Court of Appeals (CA) found that the accomplishment billing, being a private document, was inadmissible because YBC failed to authenticate it properly, as required by Section 20, Rule 132 of the Rules of Court. This failure to authenticate the key piece of evidence proved fatal to YBC’s case.

The Supreme Court affirmed the CA’s decision, emphasizing that the accomplishment billing was not an actionable document that would automatically be admitted without specific denial under oath. The Court clarified the distinction between actionable documents and those that are merely evidentiary in nature. According to Sections 7 and 8, Rule 8 of the Rules of Court, an actionable document is one upon which an action or defense is based. Its genuineness and due execution are deemed admitted unless specifically denied under oath by the adverse party. However, if the document is merely presented as evidence, this rule does not apply, and the document must be properly authenticated.

In this case, the Court held that the accomplishment billing was merely evidentiary because YBC’s cause of action was based on BII’s alleged non-payment of outstanding debts arising from the construction contract. Since there was no written building or construction contract attached to the complaint, the accomplishment billing was not the foundation of the action. Therefore, BII was not required to specifically deny its genuineness and due execution under oath. This distinction is crucial because it determines the level of scrutiny and the procedural requirements for admitting a document as evidence.

Building on this principle, the Court explained the process for authenticating private documents. Section 20, Rule 132 of the Rules of Court, provides that before a private document is received in evidence, its due execution and authenticity must be proven. This can be done by presenting a witness who saw the document executed or written, or by evidence of the genuineness of the signature or handwriting of the maker. In YBC’s case, the person who signed the accomplishment billing, Alfredo Young, did not testify in court. Instead, another witness, Nelson Go Yu, merely identified the document but did not attest to its execution or the genuineness of Young’s signature. Consequently, the CA correctly ruled that the accomplishment billing was inadmissible due to YBC’s failure to authenticate it. This highlights the necessity of presenting the right witnesses and evidence to establish the authenticity of private documents.

The Supreme Court also addressed YBC’s argument that BII had adopted the accomplishment billing as its own evidence, which should have given it probative value. The Court rejected this argument, stating that the exclusion of the document due to the failure to prove its due execution and authenticity should apply regardless of which party presented it. It would be illogical to exclude a document for one party while simultaneously according it probative value for the opposing party. This reinforces the principle that evidentiary rules must be consistently applied to ensure fairness and reliability in legal proceedings.

The Court further addressed the admissibility of a letter allegedly written by Ernesto Dacay, Sr., where he apologized for BII’s inability to fulfill its payment obligations. YBC argued that this letter was an admission against BII’s interest and should be admissible under the Rules of Court. However, the Court found that the letter, like the accomplishment billing, was a private document that required authentication. Since YBC’s witness did not identify the letter in open court, it was deemed inadmissible, and no probative value could be given to it. This underscores the importance of properly laying the foundation for the admission of documentary evidence, even if it appears to be an admission against interest.

Lastly, the Court considered a certification allegedly issued by BII’s President, Mary Dacay, affirming YBC’s successful completion of the building. However, the Court noted that YBC only presented a photocopy of this certification. The Best Evidence Rule, as outlined in Section 3, Rule 130 of the Rules of Court, requires that the original document must be produced when the subject of inquiry is the contents of a document. Since YBC did not invoke any exceptions to this rule, the photocopy was inadmissible. Moreover, YBC’s own witness admitted that the building was not completed, undermining the veracity of the certification. This illustrates the importance of adhering to the Best Evidence Rule and presenting original documents whenever possible.

The decision in Young Builders Corporation v. Benson Industries, Inc. serves as a reminder of the rigorous standards of evidence required to prove claims in construction disputes. It reinforces the importance of properly authenticating private documents, complying with the Best Evidence Rule, and presenting credible witnesses to support factual allegations. The court emphasized that the burden of proof lies with the claimant to present sufficient and admissible evidence to substantiate their claims. Without such evidence, the claimant’s cause of action will fail, regardless of the perceived weakness of the opposing party’s case.

FAQs

What was the key issue in this case?	The key issue was whether Young Builders Corporation (YBC) presented sufficient and admissible evidence to prove its monetary claims against Benson Industries, Inc. (BII) for unpaid balances from a construction project. The court focused on whether YBC properly authenticated its private documents.
What is an actionable document, and how does it differ from evidentiary documents?	An actionable document is a written instrument upon which an action or defense is based, requiring specific denial under oath if challenged. Evidentiary documents, on the other hand, are merely used as evidence and must be properly authenticated to be admissible in court.
What does it mean to authenticate a private document, and why is it important?	Authenticating a private document means proving its due execution and genuineness, typically by presenting a witness who saw it executed or evidence of the maker’s signature. Authentication is crucial because it ensures the reliability and credibility of the document before it can be admitted as evidence.
What is the Best Evidence Rule, and how did it apply in this case?	The Best Evidence Rule requires that the original document must be produced when the contents of a document are the subject of inquiry, unless an exception applies. In this case, a photocopy of a certification was deemed inadmissible because YBC did not provide a valid reason for not presenting the original.
What kind of evidence is needed to prove construction claims?	To prove construction claims, a party needs to present credible and admissible evidence such as contracts, accomplishment billings, receipts, payrolls, and testimonies from witnesses who can attest to the work performed and expenses incurred. Proper documentation and authentication are key.
What was the outcome of the case?	The Supreme Court denied the petition of Young Builders Corporation (YBC) for lack of merit. It affirmed the Court of Appeals’ decision, which reversed the Regional Trial Court’s ruling in favor of YBC, effectively dismissing the complaint against Benson Industries, Inc. (BII).
What happens if the signing party does not testify?	If the signing party cannot testify, their signature must be validated by evidence of the genuineness of the signature or handwriting of the maker by someone familiar with their signature or an expert.
What happens if a document is not original?	The Best Evidence Rule states that the original document must be produced when the contents of a document are the subject of the inquiry. Without any exceptions, secondary documents may be excluded by the court.

In conclusion, Young Builders Corporation v. Benson Industries, Inc. underscores the critical role of proper evidence and adherence to procedural rules in construction disputes. Parties must meticulously document their claims and ensure that all evidence presented is properly authenticated and admissible in court to succeed in their legal battles.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: YOUNG BUILDERS CORPORATION, V. BENSON INDUSTRIES, INC., G.R. No. 198998, June 19, 2019