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Entries in the Course of Business

Evidence Rule 130

Sec. 43Entries in the course of business. — Entries made at, or near the time of the transactions to which they refer, by a person deceased, or unable to testify, who was in a position to know the facts therein stated, may be received as prima facie evidence, if such person made the entries in his professional capacity or in the performance of duty and in the ordinary or regular course of business or duty. (Rule 130, Rules of Court)

Requisites for admissibility

In order to be admissible as entries in the course of business, it is necessary that:

a) the person who made the entry must be dead or unable to testify;

b) the entries were made at or near the time of the transaction to which they refer;

c) the entrant was in a position to know the facts stated in the entries;

d) the entries were made by entrant in his professional capacity or in the performance of a duty, whether legal, contractual, moral or religious;

e) the entries were made in the ordinary or regular course of business or duty. (Northwest Airline vs. Chiong, G.R. No. 155550, January 31, 2008)


Ground for admissibility

Entries in the course of business are accorded unusual reliability because their regularity and continuity are calculated to discipline record keepers in the habit of precision. If the entries are financial, the records are routinely balanced and audited. In actual experience, the whole of the business world function in reliance of such kind of records. (Landbank vs Monet's Export, G.R. No. 184971, April 19, 2010)


Business records vs official records

In business records, the person making the entry must be deceased or unable to testify. In official records, the person making the entry need not be deceased or unable to testify (Rule 130, Sec. 44). Both official and business records are only prima facie evidence.



Cases:


Security Bank vs Eric Gan
 G.R. No. 150464, June 27, 2006


Facts: Respondent Eric Gan opened a current account with petitioner Security Bank. Petitioner alleged that it had an agreement with respondent wherein the latter would deposit an initial amount in his current account and he could draw checks on said account provided there were sufficient funds to cover them. Furthermore, under a special arrangement with petitioner’s branch manager then, Mr. Qui, respondent was allowed to transfer funds from his account to another person’s account also within the same branch. Respondent availed of such arrangement several times by depositing checks in his account and even before they cleared, he withdrew the proceeds thereof and transferred them to the other account. These transactions were covered by what were known as “debit memos” since respondent had no sufficient funds to cover the amounts he transferred. Later on, respondent purportedly incurred an overdraft or negative balance in his account. Petitioner filed a complaint for sum of money against respondent to recover the P297,060.01 with 12% interest per annum from September 16, 1990 until fully paid.

Respondent denied liability to petitioner for the said amount.  He contended that the alleged overdraft resulted from transactions done without his knowledge and consent.

The trial court dismissed the complaint. It held that petitioner was not able to prove that respondent owed it the amount claimed considering that the ledger cards it presented were merely hearsay evidence. 

To prove its claim, petitioner presented Patricio Mercado who was the bookkeeper who handled the account of respondent and recorded his transactions in a ledger.  Based on this ledger, respondent allegedly had a negative balance of P153,757.78. This resulted from transfers of funds from respondent’s current account to another person’s account. These transfers were made under the authority of Qui. Respondent categorically denied that he ever authorized these “funds transfers.”

Issue: Whether the entries made by Mercado in the ledger were competent evidence to prove how and when the negative balance was incurred. 

Held: The ledger entries did not meet the first and third requisites.

Mercado, petitioner’s bookkeeper who prepared the entries, was presented to testify on the transactions pertaining to the account of respondent. It was in the course of his testimony that the ledger entries were presented. There was, therefore, neither justification nor necessity for the presentation of the entries as the person who made them was available to testify in court. Moreover, Mercado had no personal knowledge of the facts constituting the entries, particularly those entries which resulted in the negative balance. He had no knowledge of the truth or falsity of these entries.


Nestle Phils. vs FY Sons
 G.R. No. 150780. May 5, 2006


The provision does not apply to this case because it does not involve entries made in the course of business. Rayos testified on a statement of account she prepared on the basis of invoices and delivery orders which she, however, knew nothing about. She had no personal knowledge of the facts on which the accounts were based since, admittedly, she was not involved in the delivery of goods and was merely in charge of the records and documents of all accounts receivable as part of her duties as credit and collection manager. She thus knew nothing of the truth or falsity of the facts stated in the invoices and delivery orders, i.e., whether such deliveries were in fact made in the amounts and on the dates stated, or whether they were actually received by respondent. She was not even the credit and collection manager during the period the agreement was in effect. This can only mean that she merely obtained these documents from another without any personal knowledge of their contents. The foregoing shows that Rayos was incompetent to testify on whether or not the invoices and delivery orders turned over to her correctly reflected the details of the deliveries made.


Patula vs People
 G.R. No. 164457, April 11, 2012

The RTC excepted the entries in the ledgers from the application of the hearsay rule by also tersely stating that the ledgers “were prepared in the regular course of business.” 

This was another grave error of the RTC. The terse yet sweeping manner of justifying the application of Section 43 was unacceptable due to the need to show the concurrence of the several requisites before entries in the course of business could be excepted from the hearsay rule.


Sapio vs Undaloc Construction
G.R. No. 155034. May 22, 2008

Entries in the payroll, being entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court.


Jose, Jr. vs Michaelmar Phils., Inc.
G.R. No. 169606,  November 27, 2009

Here, all the requisites are present: (1) Dr. Heath is outside the country; (2) the entries were made near the time the random drug test was conducted; (3) Dr. Heath was in a position to know the facts made in the entries; (4) Dr. Heath made the entries in his professional capacity and in the performance of his duty; and (5) the entries were made in the ordinary or regular course of business or duty. The fact that the drug test result is unsigned does not necessarily lead to the conclusion that Jose, Jr. was not found positive for marijuana.


Adriano vs De Jesus
23 Phil 350

Any entry of baptism may be proof only of the fact that the child mentioned therein was baptized because this is all that the priest may attest from personal knowledge, and not as to the other facts, such as the age of the child and its parents, which knew only through the information of others and, therefore, purely hearsay.


Cang Yui vs Gardner
G.R. No. L-9974, March 24, 1916

If the entrant is available as a witness, the said entries will not be admitted as an exception to the hearsay rule, but they may nevertheless be availed of by said entrant as a memorandum to refresh his memory while testifying on the transactions reflected therein. (See Rule 132, Sec. 16) 


Figueras vs Serrano
52 Phil 28

When the person who made the entry is still alive and available as a witness, entries may be used as memorandum to refresh his memory on the stand, and it may be admitted in evidence to corroborate his testimony.



Palmer v. Hoffman, 318 U.S. 109 (1943)
Philamlife v. Capital Assurance Corp., (CA) 72 O.G. 3941

 

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