SCC Chemicals Corp. v. CA
G.R. No. 128538, February 28, 2001

Facts: 

State Investment House Inc. (SIHI) filed an action for a sum of money against SCC Chemicals Corp. upon failure of the latter to pay its loan. During pre-Trial, SCC admitted the existence of the loan executed through its officers. SIHI presented one witness to prove its claim. The cross-examination of said witness was postponed several times because  SCC or its  counsel  failed  to  appear  despite  notice.  SCC  was  finally declared  by  the  trial  court  to  have  waived  its  right  to  cross-examine  the  witness  of  SIHI  and  the  case  was deemed submitted for decision. The trial  court  ruled in favor  of  SIHI.  The CA affirmed  in  toto  the  judgment. 

On appeal to the SC, SCC contended that: SIHI introduced documentary evidence through the testimony of a witness whose competence was not established and whose personal knowledge of the truthfulness of the facts testified to was not demonstrated in violation of Sections 36, Rule 130; and (2) the due execution and authenticity of private documents evidencing the loan was not proven during trial.

Issues: 

1. Whether or not a defendant who failed to conduct cross-examination due to its own fault may questioned the admissibility of the evidence for violation of hearsay rule. 

2. Whether or not the due execution of loan documents is necessary when the existence of the loan had already been admitted during pre-trial.


Held: 

1. Rule 130, Section 36 reads:

SEC. 36. Testimony generally confined to personal knowledge; hearsay excluded. – A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided in these rules.

Petitioner's reliance on Section 36, Rule 130 of the Rules of Court is misplaced. As a rule, hearsay evidence is excluded and carries no probative value. However, the rule does admit of an exception. Where a party failed to object to hearsay evidence, then the same is admissible. The rationale for this exception is to be found in the right of a litigant to cross-examine. It is settled that it is the opportunity to cross-examine which negates the claim that the matters testified to by a witness are hearsay. However, the right to cross-examine may be waived. The repeated failure of a party to cross-examine the witness is an implied waiver of such right. Petitioner was afforded several opportunities by the trial court to cross-examine the other party's witness. Petitioner repeatedly failed to take advantage of these opportunities. No error was thus committed by the respondent court when it sustained the trial court's finding that petitioner had waived its right to cross-examine the opposing party's witness. It is now too late for petitioner to be raising this matter of hearsay evidence.

Nor was the assailed testimony hearsay. The Court of Appeals correctly found that the witness of SIHI was a competent witness as he testified to facts, which he knew of his personal knowledge. Thus, the requirements of Section 36, Rule 130 of the Rules of Court as to the admissibility of his testimony were satisfied.

2.  Respondent SIHI had no need to present the original of the documents as there was already a judicial admission by petitioner at pre-trial of the execution of the promissory note and receipt of the demand letter. It is now too late for petitioner to be questioning their authenticity. Its admission of the existence of these documents was sufficient to establish its obligation. Petitioner failed to submit any evidence to the contrary or proof of payment or other forms of extinguishment of said obligation. No reversible error was thus committed by the appellate court when it held petitioner liable on its obligation.