SECOND DIVISION

G.R. No. 152392             May 26, 2005

EXPERTRAVEL & TOURS, INC., petitioner,

vs.
COURT OF APPEALS and KOREAN AIRLINES, respondent.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 61000 dismissing the petition
for certiorari and mandamus filed by Expertravel and Tours, Inc. (ETI).

The Antecedents

Korean Airlines (KAL) is a corporation established and registered in the Republic of South Korea and licensed to do business in the Philippines. Its general
manager in the Philippines is Suk Kyoo Kim, while its appointed counsel was Atty. Mario Aguinaldo and his law firm.

On September 6, 1999, KAL, through Atty. Aguinaldo, filed a Complaint 2 against ETI with the Regional Trial Court (RTC) of Manila, for the collection of the
principal amount of P260,150.00, plus attorney’s fees and exemplary damages. The verification and certification against forum shopping was signed by
Atty. Aguinaldo, who indicated therein that he was the resident agent and legal counsel of KAL and had caused the preparation of the complaint.

ETI filed a motion to dismiss the complaint on the ground that Atty. Aguinaldo was not authorized to execute the verification and certificate of non-forum
shopping as required by Section 5, Rule 7 of the Rules of Court. KAL opposed the motion, contending that Atty. Aguinaldo was its resident agent and was
registered as such with the Securities and Exchange Commission (SEC) as required by the Corporation Code of the Philippines. It was further alleged that
Atty. Aguinaldo was also the corporate secretary of KAL. Appended to the said opposition was the identification card of Atty. Aguinaldo, showing that he
was the lawyer of KAL.
During the hearing of January 28, 2000, Atty. Aguinaldo claimed that he had been authorized to file the complaint through a resolution of the KAL Board of
Directors approved during a special meeting held on June 25, 1999. Upon his motion, KAL was given a period of 10 days within which to submit a copy of
the said resolution. The trial court granted the motion. Atty. Aguinaldo subsequently filed other similar motions, which the trial court granted.

Finally, KAL submitted on March 6, 2000 an Affidavit 3 of even date, executed by its general manager Suk Kyoo Kim, alleging that the board of directors
conducted a special teleconference on June 25, 1999, which he and Atty. Aguinaldo attended. It was also averred that in that same teleconference, the
board of directors approved a resolution authorizing Atty. Aguinaldo to execute the certificate of non-forum shopping and to file the complaint. Suk Kyoo
Kim also alleged, however, that the corporation had no written copy of the aforesaid resolution.

On April 12, 2000, the trial court issued an Order 4 denying the motion to dismiss, giving credence to the claims of Atty. Aguinaldo and Suk Kyoo Kim that
the KAL Board of Directors indeed conducted a teleconference on June 25, 1999, during which it approved a resolution as quoted in the submitted
affidavit.

ETI filed a motion for the reconsideration of the Order, contending that it was inappropriate for the court to take judicial notice of the said teleconference
without any prior hearing. The trial court denied the motion in its Order 5 dated August 8, 2000.

ETI then filed a petition for certiorari and mandamus, assailing the orders of the RTC. In its comment on the petition, KAL appended a certificate signed by
Atty. Aguinaldo dated January 10, 2000, worded as follows:

SECRETARY’S/RESIDENT AGENT’S CERTIFICATE

KNOW ALL MEN BY THESE PRESENTS:

I, Mario A. Aguinaldo, of legal age, Filipino, and duly elected and appointed Corporate Secretary and Resident Agent of KOREAN AIRLINES, a
foreign corporation duly organized and existing under and by virtue of the laws of the Republic of Korea and also duly registered and authorized to
do business in the Philippines, with office address at Ground Floor, LPL Plaza Building, 124 Alfaro St., Salcedo Village, Makati City, HEREBY
CERTIFY that during a special meeting of the Board of Directors of the Corporation held on June 25, 1999 at which a quorum was present, the
said Board unanimously passed, voted upon and approved the following resolution which is now in full force and effect, to wit:

RESOLVED, that Mario A. Aguinaldo and his law firm M.A. Aguinaldo & Associates or any of its lawyers are hereby appointed and
authorized to take with whatever legal action necessary to effect the collection of the unpaid account of Expert Travel & Tours. They are
hereby specifically authorized to prosecute, litigate, defend, sign and execute any document or paper necessary to the filing and
prosecution of said claim in Court, attend the Pre-Trial Proceedings and enter into a compromise agreement relative to the above-
mentioned claim.

IN WITNESS WHEREOF, I have hereunto affixed my signature this 10 th day of January, 1999, in the City of Manila, Philippines.

(Sgd.)
 MARIO A. AGUINALDO
Resident Agent

SUBSCRIBED AND SWORN to before me this 10th day of January, 1999, Atty. Mario A. Aguinaldo exhibiting to me his Community Tax Certificate
No. 14914545, issued on January 7, 2000 at Manila, Philippines.

Doc. No. 119; (Sgd.)

Page No. 25; ATTY. HENRY D. ADASA
Book No. XXIV Notary Public
Series of 2000. Until December 31, 2000
PTR #889583/MLA 1/3/20006

On December 18, 2001, the CA rendered judgment dismissing the petition, ruling that the verification and certificate of non-forum shopping executed by
Atty. Aguinaldo was sufficient compliance with the Rules of Court. According to the appellate court, Atty. Aguinaldo had been duly authorized by the board
resolution approved on June 25, 1999, and was the resident agent of KAL. As such, the RTC could not be faulted for taking judicial notice of the said
teleconference  of the KAL Board of Directors.

ETI filed a motion for reconsideration of the said decision, which the CA denied. Thus, ETI, now the petitioner, comes to the Court by way of petition for
review on certiorari  and raises the following issue:

DID PUBLIC RESPONDENT COURT OF APPEALS DEPART FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
WHEN IT RENDERED ITS QUESTIONED DECISION AND WHEN IT ISSUED ITS QUESTIONED RESOLUTION, ANNEXES A AND B OF THE
INSTANT PETITION?7

The petitioner asserts that compliance with Section 5, Rule 7, of the Rules of Court can be determined only from the contents of the complaint and not by
documents or pleadings outside thereof. Hence, the trial court committed grave abuse of discretion amounting to excess of jurisdiction, and the CA erred in
considering the affidavit of the respondent’s general manager, as well as the Secretary’s/Resident Agent’s Certification and the resolution of the board of
directors contained therein, as proof of compliance with the requirements of Section 5, Rule 7 of the Rules of Court. The petitioner also maintains that the
RTC cannot take judicial notice of the said teleconference without prior hearing, nor any motion therefor. The petitioner reiterates its submission that the
teleconference and the resolution adverted to by the respondent was a mere fabrication.

The respondent, for its part, avers that the issue of whether modern technology is used in the field of business is a factual issue; hence, cannot be raised
in a petition for review on certiorari under Rule 45 of the Rules of Court. On the merits of the petition, it insists that Atty. Aguinaldo, as the resident agent
and corporate secretary, is authorized to sign and execute the certificate of non-forum shopping required by Section 5, Rule 7 of the Rules of Court, on top
of the board resolution approved during the teleconference of June 25, 1999. The respondent insists that "technological advances in this time and age are
as commonplace as daybreak." Hence, the courts may take judicial notice that the Philippine Long Distance Telephone Company, Inc. had provided a
record of corporate conferences and meetings through FiberNet using fiber-optic transmission technology, and that such technology facilitates voice and
image transmission with ease; this makes constant communication between a foreign-based office and its Philippine-based branches faster and easier,
allowing for cost-cutting in terms of travel concerns. It points out that even the E-Commerce Law has recognized this modern technology. The respondent
posits that the courts are aware of this development in technology; hence, may take judicial notice thereof without need of hearings. Even if such hearing is
required, the requirement is nevertheless satisfied if a party is allowed to file pleadings by way of comment or opposition thereto.

In its reply, the petitioner pointed out that there are no rulings on the matter of teleconferencing as a means of conducting meetings of board of directors
for purposes of passing a resolution; until and after teleconferencing is recognized as a legitimate means of gathering a quorum of board of directors, such
cannot be taken judicial notice of by the court. It asserts that safeguards must first be set up to prevent any mischief on the public or to protect the general
public from any possible fraud. It further proposes possible amendments to the Corporation Code to give recognition to such manner of board meetings to
transact business for the corporation, or other related corporate matters; until then, the petitioner asserts, teleconferencing cannot be the subject of judicial
notice.

The petitioner further avers that the supposed holding of a special meeting on June 25, 1999 through teleconferencing where Atty. Aguinaldo was
supposedly given such an authority is a farce, considering that there was no mention of where it was held, whether in this country or elsewhere. It insists
that the Corporation Code requires board resolutions of corporations to be submitted to the SEC. Even assuming that there was such a teleconference, it
would be against the provisions of the Corporation Code not to have any record thereof.

The petitioner insists that the teleconference and resolution adverted to by the respondent in its pleadings were mere fabrications foisted by the
respondent and its counsel on the RTC, the CA and this Court.

The petition is meritorious.

Section 5, Rule 7 of the Rules of Court provides:

SEC. 5. Certification against forum shopping.—  The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact
within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be
cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.
It is settled that the requirement to file a certificate of non-forum shopping is mandatory 8 and that the failure to comply with this requirement cannot be
excused. The certification is a peculiar and personal responsibility of the party, an assurance given to the court or other tribunal that there are no other
pending cases involving basically the same parties, issues and causes of action. Hence, the certification must be accomplished by the party himself
because he has actual knowledge of whether or not he has initiated similar actions or proceedings in different courts or tribunals. Even his counsel may be
unaware of such facts.9 Hence, the requisite certification executed by the plaintiff’s counsel will not suffice. 10

In a case where the plaintiff is a private corporation, the certification may be signed, for and on behalf of the said corporation, by a specifically authorized
person, including its retained counsel, who has personal knowledge of the facts required to be established by the documents. The reason was explained
by the Court in National Steel Corporation v. Court of Appeals,11  as follows:

Unlike natural persons, corporations may perform physical actions only through properly delegated individuals; namely, its officers and/or agents.

The corporation, such as the petitioner, has no powers except those expressly conferred on it by the Corporation Code and those that are implied
by or are incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/or its duly-authorized officers
and agents. Physical acts, like the signing of documents, can be performed only by natural persons duly-authorized for the purpose by corporate
by-laws or by specific act of the board of directors. "All acts within the powers of a corporation may be performed by agents of its selection; and
except so far as limitations or restrictions which may be imposed by special charter, by-law, or statutory provisions, the same general principles of
law which govern the relation of agency for a natural person govern the officer or agent of a corporation, of whatever status or rank, in respect to
his power to act for the corporation; and agents once appointed, or members acting in their stead, are subject to the same rules, liabilities and
incapacities as are agents of individuals and private persons."

… For who else knows of the circumstances required in the Certificate but its own retained counsel. Its regular officers, like its board chairman and
president, may not even know the details required therein.

Indeed, the certificate of non-forum shopping may be incorporated in the complaint or appended thereto as an integral part of the complaint. The rule is
that compliance with the rule after the filing of the complaint, or the dismissal of a complaint based on its non-compliance with the rule, is impermissible.
However, in exceptional circumstances, the court may allow subsequent compliance with the rule. 12 If the authority of a party’s counsel to execute a
certificate of non-forum shopping is disputed by the adverse party, the former is required to show proof of such authority or representation.

In this case, the petitioner, as the defendant in the RTC, assailed the authority of Atty. Aguinaldo to execute the requisite verification and certificate of non-
forum shopping as the resident agent and counsel of the respondent. It was, thus, incumbent upon the respondent, as the plaintiff, to allege and establish
that Atty. Aguinaldo had such authority to execute the requisite verification and certification for and in its behalf. The respondent, however, failed to do so.

The verification and certificate of non-forum shopping which was incorporated in the complaint and signed by Atty. Aguinaldo reads:
 I, Mario A. Aguinaldo of legal age, Filipino, with office address at Suite 210 Gedisco Centre, 1564 A. Mabini cor. P. Gil Sts., Ermita, Manila, after
having sworn to in accordance with law hereby deposes and say: THAT -

1. I am the Resident Agent and Legal Counsel of the plaintiff in the above entitled case and have caused the preparation of the above complaint;

2. I have read the complaint and that all the allegations contained therein are true and correct based on the records on files;

3. I hereby further certify that I have not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of
Appeals, or different divisions thereof, or any other tribunal or agency. If I subsequently learned that a similar action or proceeding has been filed
or is pending before the Supreme Court, the Court of Appeals, or different divisions thereof, or any tribunal or agency, I will notify the court, tribunal
or agency within five (5) days from such notice/knowledge.

(Sgd.)

MARIO A. AGUINALDO
Affiant
CITY OF MANILA

SUBSCRIBED AND SWORN TO before me this 30th day of August, 1999, affiant exhibiting to me his Community Tax Certificate No. 00671047
issued on January 7, 1999 at Manila, Philippines.

Doc. No. 1005; (Sgd.)

Page No. 198;
Book No. XXI ATTY. HENRY D. ADASA
Series of 1999. Notary Public
Until December 31, 2000
PTR No. 320501 Mla. 1/4/9913

As gleaned from the aforequoted certification, there was no allegation that Atty. Aguinaldo had been authorized to execute the certificate of non-forum
shopping by the respondent’s Board of Directors; moreover, no such board resolution was appended thereto or incorporated therein.

While Atty. Aguinaldo is the resident agent of the respondent in the Philippines, this does not mean that he is authorized to execute the requisite
certification against forum shopping. Under Section 127, in relation to Section 128 of the Corporation Code, the authority of the resident agent of a foreign
corporation with license to do business in the Philippines is to receive, for and in behalf of the foreign corporation, services and other legal processes in all
actions and other legal proceedings against such corporation, thus:
 SEC. 127. Who may be a resident agent. – A resident agent may either be an individual residing in the Philippines or a domestic corporation
lawfully transacting business in the Philippines: Provided, That in the case of an individual, he must be of good moral character and of sound
financial standing.

SEC. 128. Resident agent; service of process. – The Securities and Exchange Commission shall require as a condition precedent to the issuance
of the license to transact business in the Philippines by any foreign corporation that such corporation file with the Securities and Exchange
Commission a written power of attorney designating some persons who must be a resident of the Philippines, on whom any summons and other
legal processes may be served in all actions or other legal proceedings against such corporation, and consenting that service upon such resident
agent shall be admitted and held as valid as if served upon the duly-authorized officers of the foreign corporation as its home office. 14

Under the law, Atty. Aguinaldo was not specifically authorized to execute a certificate of non-forum shopping as required by Section 5, Rule 7 of the Rules
of Court. This is because while a resident agent may be aware of actions filed against his principal (a foreign corporation doing business in the
Philippines), such resident may not be aware of actions initiated by its principal, whether in the Philippines against a domestic corporation or private
individual, or in the country where such corporation was organized and registered, against a Philippine registered corporation or a Filipino citizen.

The respondent knew that its counsel, Atty. Aguinaldo, as its resident agent, was not specifically authorized to execute the said certification. It attempted to
show its compliance with the rule subsequent to the filing of its complaint by submitting, on March 6, 2000, a resolution purporting to have been approved
by its Board of Directors during a teleconference held on June 25, 1999, allegedly with Atty. Aguinaldo and Suk Kyoo Kim in attendance. However, such
attempt of the respondent casts veritable doubt not only on its claim that such a teleconference was held, but also on the approval by the Board of
Directors of the resolution authorizing Atty. Aguinaldo to execute the certificate of non-forum shopping.

In its April 12, 2000 Order, the RTC took judicial notice that because of the onset of modern technology, persons in one location may confer with other
persons in other places, and, based on the said premise, concluded that Suk Kyoo Kim and Atty. Aguinaldo had a teleconference with the respondent’s
Board of Directors in South Korea on June 25, 1999. The CA, likewise, gave credence to the respondent’s claim that such a teleconference took place, as
contained in the affidavit of Suk Kyoo Kim, as well as Atty. Aguinaldo’s certification.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be
well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal
guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that judicial notice is limited to facts
evidenced by public records and facts of general notoriety. [15] Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it is
either: (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resorting to sources
whose accuracy cannot reasonably be questionable.16

Things of "common knowledge," of which courts take judicial matters coming to the knowledge of men generally in the course of the ordinary experiences
of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts
which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided, they are of such
universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person. As the common
knowledge of man ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of common knowledge. But a court
cannot take judicial notice of any fact which, in part, is dependent on the existence or non-existence of a fact of which the court has no constructive
knowledge.17

In this age of modern technology, the courts may take judicial notice that business transactions may be made by individuals through teleconferencing.
Teleconferencing is interactive group communication (three or more people in two or more locations) through an electronic medium. In general terms,
teleconferencing can bring people together under one roof even though they are separated by hundreds of miles. 18 This type of group communication may
be used in a number of ways, and have three basic types: (1) video conferencing - television-like communication augmented with sound; (2) computer
conferencing - printed communication through keyboard terminals, and (3) audio-conferencing-verbal communication via the telephone with optional
capacity for telewriting or telecopying.19

A teleconference represents a unique alternative to face-to-face (FTF) meetings. It was first introduced in the 1960’s with American Telephone and
Telegraph’s Picturephone. At that time, however, no demand existed for the new technology. Travel costs were reasonable and consumers were unwilling
to pay the monthly service charge for using the picturephone, which was regarded as more of a novelty than as an actual means for everyday
communication.20 In time, people found it advantageous to hold teleconferencing in the course of business and corporate governance, because of the
money saved, among other advantages include:

1. People (including outside guest speakers) who wouldn’t normally attend a distant FTF meeting can participate.

2. Follow-up to earlier meetings can be done with relative ease and little expense.

3. Socializing is minimal compared to an FTF meeting; therefore, meetings are shorter and more oriented to the primary purpose of the meeting.

4. Some routine meetings are more effective since one can audio-conference from any location equipped with a telephone.

5. Communication between the home office and field staffs is maximized.

6. Severe climate and/or unreliable transportation may necessitate teleconferencing.

7. Participants are generally better prepared than for FTF meetings.

8. It is particularly satisfactory for simple problem-solving, information exchange, and procedural tasks.

9. Group members participate more equally in well-moderated teleconferences than an FTF meeting. 21

On the other hand, other private corporations opt not to hold teleconferences because of the following disadvantages:

1. Technical failures with equipment, including connections that aren’t made.

 2. Unsatisfactory for complex interpersonal communication, such as negotiation or bargaining.

3. Impersonal, less easy to create an atmosphere of group rapport.

4. Lack of participant familiarity with the equipment, the medium itself, and meeting skills.

5. Acoustical problems within the teleconferencing rooms.

6. Difficulty in determining participant speaking order; frequently one person monopolizes the meeting.

7. Greater participant preparation time needed.

8. Informal, one-to-one, social interaction not possible. 22

Indeed, teleconferencing can only facilitate the linking of people; it does not alter the complexity of group communication. Although it may be easier to
communicate via teleconferencing, it may also be easier to miscommunicate. Teleconferencing cannot satisfy the individual needs of every type of
meeting.23

In the Philippines, teleconferencing and videoconferencing of members of board of directors of private corporations is a reality, in light of Republic Act No.
8792. The Securities and Exchange Commission issued SEC Memorandum Circular No. 15, on November 30, 2001, providing the guidelines to be
complied with related to such conferences.24 Thus, the Court agrees with the RTC that persons in the Philippines may have a teleconference with a group
of persons in South Korea relating to business transactions or corporate governance.

Even given the possibility that Atty. Aguinaldo and Suk Kyoo Kim participated in a teleconference along with the respondent’s Board of Directors, the Court
is not convinced that one was conducted; even if there had been one, the Court is not inclined to believe that a board resolution was duly passed
specifically authorizing Atty. Aguinaldo to file the complaint and execute the required certification against forum shopping.

The records show that the petitioner filed a motion to dismiss the complaint on the ground that the respondent failed to comply with Section 5, Rule 7 of the
Rules of Court. The respondent opposed the motion on December 1, 1999, on its contention that Atty. Aguinaldo, its resident agent, was duly authorized to
sue in its behalf. The respondent, however, failed to establish its claim that Atty. Aguinaldo was its resident agent in the Philippines. Even the identification
card25 of Atty. Aguinaldo which the respondent appended to its pleading merely showed that he is the company lawyer of the respondent’s Manila Regional
Office.

The respondent, through Atty. Aguinaldo, announced the holding of the teleconference only during the hearing of January 28, 2000; Atty. Aguinaldo then
prayed for ten days, or until February 8, 2000, within which to submit the board resolution purportedly authorizing him to file the complaint and execute the
required certification against forum shopping. The court granted the motion. 26 The respondent, however, failed to comply, and instead prayed for 15 more
days to submit the said resolution, contending that it was with its main office in Korea. The court granted the motion per its Order 27 dated February 11,
2000. The respondent again prayed for an extension within which to submit the said resolution, until March 6, 2000. 28 It was on the said date that the
respondent submitted an affidavit of its general manager Suk Kyoo Kim, stating, inter alia,  that he and Atty. Aguinaldo attended the said teleconference on
June 25, 1999, where the Board of Directors supposedly approved the following resolution:

RESOLVED, that Mario A. Aguinaldo and his law firm M.A. Aguinaldo & Associates or any of its lawyers are hereby appointed and authorized to
take with whatever legal action necessary to effect the collection of the unpaid account of Expert Travel & Tours. They are hereby specifically
authorized to prosecute, litigate, defend, sign and execute any document or paper necessary to the filing and prosecution of said claim in Court,
attend the Pre-trial Proceedings and enter into a compromise agreement relative to the above-mentioned claim. 29

But then, in the same affidavit, Suk Kyoo Kim declared that the respondent "do[es] not keep a written copy of the aforesaid Resolution" because no
records of board resolutions approved during teleconferences were kept. This belied the respondent’s earlier allegation in its February 10, 2000 motion for
extension of time to submit the questioned resolution that it was in the custody of its main office in Korea. The respondent gave the trial court the
impression that it needed time to secure a copy of the resolution kept in Korea, only to allege later (via the affidavit of Suk Kyoo Kim) that it had no such
written copy. Moreover, Suk Kyoo Kim stated in his affidavit that the resolution was embodied in the Secretary’s/Resident Agent’s Certificate signed by
Atty. Aguinaldo. However, no such resolution was appended to the said certificate.

The respondent’s allegation that its board of directors conducted a teleconference on June 25, 1999 and approved the said resolution (with Atty. Aguinaldo
in attendance) is incredible, given the additional fact that no such allegation was made in the complaint. If the resolution had indeed been approved on
June 25, 1999, long before the complaint was filed, the respondent should have incorporated it in its complaint, or at least appended a copy thereof. The
respondent failed to do so. It was only on January 28, 2000 that the respondent claimed, for the first time, that there was such a meeting of the Board of
Directors held on June 25, 1999; it even represented to the Court that a copy of its resolution was with its main office in Korea, only to allege later that no
written copy existed. It was only on March 6, 2000 that the respondent alleged, for the first time, that the meeting of the Board of Directors where the
resolution was approved was held via  teleconference.

Worse still, it appears that as early as January 10, 1999, Atty. Aguinaldo had signed a Secretary’s/Resident Agent’s Certificate alleging that the board of
directors held a teleconference on June 25, 1999. No such certificate was appended to the complaint, which was filed on September 6, 1999. More
importantly, the respondent did not explain why the said certificate was signed by Atty. Aguinaldo as early as January 9, 1999, and yet was notarized one
year later (on January 10, 2000); it also did not explain its failure to append the said certificate to the complaint, as well as to its Compliance dated March
6, 2000. It was only on January 26, 2001 when the respondent filed its comment in the CA that it submitted the Secretary’s/Resident Agent’s
Certificate30 dated January 10, 2000.

The Court is, thus, more inclined to believe that the alleged teleconference on June 25, 1999 never took place, and that the resolution allegedly approved
by the respondent’s Board of Directors during the said teleconference was a mere concoction purposefully foisted on the RTC, the CA and this Court, to
avert the dismissal of its complaint against the petitioner.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 61000 is REVERSED and SET
ASIDE. The Regional Trial Court of Manila is hereby ORDERED to dismiss, without prejudice, the complaint of the respondent.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 170633             October 17, 2007

MCC INDUSTRIAL SALES CORPORATION, petitioner,

vs.
SSANGYONG CORPORATION, respondents.

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari of the Decision1 of the Court of Appeals in CA-G.R. CV No. 82983 and its Resolution 2 denying the
motion for reconsideration thereof.

Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at Binondo, Manila, is engaged in the business of importing and wholesaling
stainless steel products.3 One of its suppliers is the Ssangyong Corporation (Ssangyong), 4 an international trading company5 with head office in Seoul,
South Korea and regional headquarters in Makati City, Philippines. 6 The two corporations conducted business through telephone calls and facsimile or
telecopy transmissions.7 Ssangyong would send the pro forma invoices containing the details of the steel product order to MCC; if the latter conforms
thereto, its representative affixes his signature on the faxed copy and sends it back to Ssangyong, again by fax. 8

On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter 9 addressed to Gregory Chan, MCC Manager [also the President 10 of Sanyo Seiki
Stainless Steel Corporation], to confirm MCC's and Sanyo Seiki's order of 220 metric tons (MT) of hot rolled stainless steel under a preferential rate
of US$1,860.00 per MT. Chan, on behalf of the corporations, assented and affixed his signature on the conforme portion of the letter.11

On April 17, 2000, Ssangyong forwarded to MCC Pro Forma Invoice No. ST2-POSTSO40112 containing the terms and conditions of the transaction. MCC
sent back by fax to Ssangyong the invoice bearing the conformity signature 13 of Chan. As stated in the pro forma invoice, payment for the ordered steel
products would be made through an irrevocable letter of credit (L/C) at sight in favor of Ssangyong. 14 Following their usual practice, delivery of the goods
was to be made after the L/C had been opened.

In the meantime, because of its confirmed transaction with MCC, Ssangyong placed the order with its steel manufacturer, Pohang Iron and Steel
Corporation (POSCO), in South Korea15 and paid the same in full.
Because MCC could open only a partial letter of credit, the order for 220MT of steel was split into two, 16 one for 110MT covered by Pro Forma Invoice
No. ST2-POSTS0401-117 and another for 110MT covered by ST2-POSTS0401-2,18 both dated April 17, 2000.

On June 20, 2000, Ssangyong, through its Manila Office, informed Sanyo Seiki and Chan, by way of a fax transmittal, that it was ready to ship 193.597MT
of stainless steel from Korea to the Philippines. It requested that the opening of the L/C be facilitated. 19 Chan affixed his signature on the fax transmittal
and returned the same, by fax, to Ssangyong.20

Two days later, on June 22, 2000, Ssangyong Manila Office informed Sanyo Seiki, thru Chan, that it was able to secure a US$30/MT price adjustment on
the contracted price of US$1,860.00/MT for the 200MT stainless steel, and that the goods were to be shipped in two tranches, the first 100MT on that day
and the second 100MT not later than June 27, 2000. Ssangyong reiterated its request for the facilitation of the L/C's opening. 21

Ssangyong later, through its Manila Office, sent a letter, on June 26, 2000, to the Treasury Group of Sanyo Seiki that it was looking forward to receiving
the L/C details and a cable copy thereof that day. 22 Ssangyong sent a separate letter of the same date to Sanyo Seiki requesting for the opening of the L/C
covering payment of the first 100MT not later than June 28, 2000. 23 Similar letters were transmitted by Ssangyong Manila Office on June 27, 2000. 24 On
June 28, 2000, Ssangyong sent another facsimile letter to MCC stating that its principal in Korea was already in a difficult situation 25 because of the failure
of Sanyo Seiki and MCC to open the L/C's.

The following day, June 29, 2000, Ssangyong received, by fax, a letter signed by Chan, requesting an extension of time to open the L/C because MCC's
credit line with the bank had been fully availed of in connection with another transaction, and MCC was waiting for an additional credit line. 26 On the same
date, Ssangyong replied, requesting that it be informed of the date when the L/C would be opened, preferably at the earliest possible time, since its Steel
Team 2 in Korea was having problems and Ssangyong was incurring warehousing costs. 27 To maintain their good business relationship and to support
MCC in its financial predicament, Ssangyong offered to negotiate with its steel manufacturer, POSCO, another US$20/MT discount on the price of the
stainless steel ordered. This was intimated in Ssangyong's June 30, 2000 letter to MCC. 28 On July 6, 2000, another follow-up letter29 for the opening of the
L/C was sent by Ssangyong to MCC.

However, despite Ssangyong's letters, MCC failed to open a letter of credit. 30 Consequently, on August 15, 2000, Ssangyong, through counsel, wrote
Sanyo Seiki that if the L/C's were not opened, Ssangyong would be compelled to cancel the contract and hold MCC liable for damages for breach thereof
amounting to US$96,132.18, inclusive of warehouse expenses, related interests and charges. 31

Later, Pro Forma Invoice Nos. ST2-POSTS080-132 and ST2-POSTS080-233 dated August 16, 2000 were issued by Ssangyong and sent via fax to MCC.
The invoices slightly varied the terms of the earlier pro forma invoices (ST2-POSTSO401, ST2-POSTS0401-1 and ST2-POSTS0401-2), in that the
quantity was now officially 100MT per invoice and the price was reduced to US$1,700.00 per MT. As can be gleaned from the photocopies of the said
August 16, 2000 invoices submitted to the court, they both bear the conformity signature of MCC Manager Chan.

On August 17, 2000, MCC finally opened an L/C with PCIBank for US$170,000.00 covering payment for 100MT of stainless steel coil under Pro
Forma Invoice No. ST2-POSTS080-2.34 The goods covered by the said invoice were then shipped to and received by MCC. 35
MCC then faxed to Ssangyong a letter dated August 22, 2000 signed by Chan, requesting for a price adjustment of the order stated in Pro Forma Invoice
No. ST2-POSTS080-1, considering that the prevailing price of steel at that time was US$1,500.00/MT, and that MCC lost a lot of money due to a recent
strike.36

Ssangyong rejected the request, and, on August 23, 2000, sent a demand letter 37 to Chan for the opening of the second and last L/C of US$170,000.00
with a warning that, if the said L/C was not opened by MCC on August 26, 2000, Ssangyong would be constrained to cancel the contract and hold MCC
liable for US$64,066.99 (representing cost difference, warehousing expenses, interests and charges as of August 15, 2000) and other damages for
breach. Chan failed to reply.

Exasperated, Ssangyong through counsel wrote a letter to MCC, on September 11, 2000, canceling the sales contract under ST2-POSTS0401-1 /ST2-
POSTS0401-2, and demanding payment of US$97,317.37 representing losses, warehousing expenses, interests and charges. 38

Ssangyong then filed, on November 16, 2001, a civil action for damages due to breach of contract against defendants MCC, Sanyo Seiki and Gregory
Chan before the Regional Trial Court of Makati City. In its complaint, 39 Ssangyong alleged that defendants breached their contract when they refused to
open the L/C in the amount of US$170,000.00 for the remaining 100MT of steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-
2.

After Ssangyong rested its case, defendants filed a Demurrer to Evidence 40 alleging that Ssangyong failed to present the original copies of the pro
forma invoices on which the civil action was based. In an Order dated April 24, 2003, the court denied the demurrer, ruling that the documentary evidence
presented had already been admitted in the December 16, 2002 Order 41 and their admissibility finds support in Republic Act (R.A.) No. 8792, otherwise
known as the Electronic Commerce Act of 2000. Considering that both testimonial and documentary evidence tended to substantiate the material
allegations in the complaint, Ssangyong's evidence sufficed for purposes of a prima facie case. 42

After trial on the merits, the RTC rendered its Decision 43 on March 24, 2004, in favor of Ssangyong. The trial court ruled that when plaintiff agreed to sell
and defendants agreed to buy the 220MT of steel products for the price of US$1,860 per MT, the contract was perfected. The subject transaction was
evidenced by Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2, which were later amended only in terms of reduction of volume as well
as the price per MT, following Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-2. The RTC, however, excluded Sanyo Seiki from liability
for lack of competent evidence. The fallo of the decision reads:

WHEREFORE, premises considered, Judgment is hereby rendered ordering defendants MCC Industrial Sales Corporation and Gregory Chan, to
pay plaintiff, jointly and severally the following:

1) Actual damages of US$93,493.87 representing the outstanding principal claim plus interest at the rate of 6% per annum from March 30, 2001.

2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per counsel's appearance in court, the same being deemed just and equitable
considering that by reason of defendants' breach of their obligation under the subject contract, plaintiff was constrained to litigate to enforce its
rights and recover for the damages it sustained, and therefore had to engage the services of a lawyer.
 3) Costs of suit.

No award of exemplary damages for lack of sufficient basis.

SO ORDERED.44

On April 22, 2004, MCC and Chan, through their counsel of record, Atty. Eladio B. Samson, filed their Notice of Appeal. 45 On June 8, 2004, the law office
of Castillo Zamora & Poblador entered its appearance as their collaborating counsel.

In their Appeal Brief filed on March 9, 2005,46 MCC and Chan raised before the CA the following errors of the RTC:

I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING THAT APPELLANTS VIOLATED THEIR CONTRACT WITH APPELLEE

A. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING THAT APPELLANTS AGREED TO PURCHASE 200 METRIC
TONS OF STEEL PRODUCTS FROM APPELLEE, INSTEAD OF ONLY 100 METRIC TONS.

1. THE HONORABLE COURT A QUO PLAINLY ERRED IN ADMITTING IN EVIDENCE THE PRO FORMA INVOICES WITH
REFERENCE NOS. ST2- POSTS0401-1 AND ST2-POSTS0401-2.

II. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING ACTUAL DAMAGES TO APPELLEE.

III. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING ATTORNEY'S FEES TO APPELLEE.

IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING APPELLANT GREGORY CHAN JOINTLY AND SEVERALLY LIABLE
WITH APPELLANT MCC.47

On August 31, 2005, the CA rendered its Decision48 affirming the ruling of the trial court, but absolving Chan of any liability. The appellate court ruled,
among others, that Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E", "E-1" and "F") were admissible in evidence,
although they were mere facsimile printouts of MCC's steel orders. 49 The dispositive portion of the appellate court's decision reads:

WHEREFORE, premises considered, the Court holds:

(1) The award of actual damages, with interest, attorney's fees and costs ordered by the lower court is hereby AFFIRMED.

(2) Appellant Gregory Chan is hereby ABSOLVED from any liability.

SO ORDERED.50
A copy of the said Decision was received by MCC's and Chan's principal counsel, Atty. Eladio B. Samson, on September 14, 2005. 51 Their collaborating
counsel, Castillo Zamora & Poblador,52 likewise, received a copy of the CA decision on September 19, 2005. 53

On October 4, 2005, Castillo Zamora & Poblador, on behalf of MCC, filed a motion for reconsideration of the said decision. 54 Ssangyong opposed the
motion contending that the decision of the CA had become final and executory on account of the failure of MCC to file the said motion within the
reglementary period. The appellate court resolved, on November 22, 2005, to deny the motion on its merits, 55 without, however, ruling on the procedural
issue raised.

Aggrieved, MCC filed a petition for review on certiorari56 before this Court, imputing the following errors to the Court of Appeals:

THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN ACCORDANCE WITH JURISPRUDENCE AND SANCTIONED A
DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL PROCEEDINGS BY REVERSING THE COURT A
QUO'S DISMISSAL OF THE COMPLAINT IN CIVIL CASE NO. 02-124 CONSIDERING THAT:

I. THE COURT OF APPEALS ERRED IN SUSTAINING THE ADMISSIBILITY IN EVIDENCE OF THE PRO-FORMA INVOICES WITH
REFERENCE NOS. ST2-POSTSO401-1 AND ST2-POSTSO401-2, DESPITE THE FACT THAT THE SAME WERE MERE
PHOTOCOPIES OF FACSIMILE PRINTOUTS.

II. THE COURT OF APPEALS FAILED TO APPRECIATE THE OBVIOUS FACT THAT, EVEN ASSUMING PETITIONER BREACHED
THE SUPPOSED CONTRACT, THE FACT IS THAT PETITIONER FAILED TO PROVE THAT IT SUFFERED ANY DAMAGES AND THE
AMOUNT THEREOF.

III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT OF US$93,493.87 IS SIMPLY UNCONSCIONABLE AND SHOULD HAVE
BEEN AT LEAST REDUCED, IF NOT DELETED BY THE COURT OF APPEALS. 57

In its Comment, Ssangyong sought the dismissal of the petition, raising the following arguments: that the CA decision dated 15 August 2005 is already
final and executory, because MCC's motion for reconsideration was filed beyond the reglementary period of 15 days from receipt of a copy thereof, and
that, in any case, it was a pro forma motion; that MCC breached the contract for the purchase of the steel products when it failed to open the required
letter of credit; that the printout copies and/or photocopies of facsimile or telecopy transmissions were properly admitted by the trial court because they are
considered original documents under R.A. No. 8792; and that MCC is liable for actual damages and attorney's fees because of its breach, thus, compelling
Ssangyong to litigate.

The principal issues that this Court is called upon to resolve are the following:

I – Whether the CA decision dated 15 August 2005 is already final and executory;

II – Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence and admissible as such;
III – Whether there was a perfected contract of sale between MCC and Ssangyong, and, if in the affirmative, whether MCC breached the said contract; and

IV – Whether the award of actual damages and attorney's fees in favor of Ssangyong is proper and justified.

-I-

It cannot be gainsaid that in Albano v. Court of Appeals,58 we held that receipt of a copy of the decision by one of several counsels on record is notice to
all, and the period to appeal commences on such date even if the other counsel has not yet received a copy of the decision. In this case, when Atty.
Samson received a copy of the CA decision on September 14, 2005, MCC had only fifteen (15) days within which to file a motion for reconsideration
conformably with Section 1, Rule 52 of the Rules of Court, or to file a petition for review on certiorari in accordance with Section 2, Rule 45. The period
should not be reckoned from September 29, 2005 (when Castillo Zamora & Poblador received their copy of the decision) because notice to Atty. Samson
is deemed notice to collaborating counsel.

We note, however, from the records of the CA, that it was Castillo Zamora & Poblador, not Atty. Samson, which filed both MCC's and Chan's Brief and
Reply Brief. Apparently, the arrangement between the two counsels was for the collaborating, not the principal, counsel to file the appeal brief and
subsequent pleadings in the CA. This explains why it was Castillo Zamora & Poblador which filed the motion for the reconsideration of the CA decision,
and they did so on October 5, 2005, well within the 15-day period from September 29, 2005, when they received their copy of the CA decision. This could
also be the reason why the CA did not find it necessary to resolve the question of the timeliness of petitioner's motion for reconsideration, even as the CA
denied the same.

Independent of this consideration though, this Court assiduously reviewed the records and found that strong concerns of substantial justice warrant the
relaxation of this rule.

In Philippine Ports Authority v. Sargasso Construction and Development Corporation,59 we ruled that:

In Orata v. Intermediate Appellate Court, we held that where strong considerations of substantive justice are manifest in the petition, this Court
may relax the strict application of the rules of procedure in the exercise of its legal jurisdiction. In addition to the basic merits of the main case,
such a petition usually embodies justifying circumstance which warrants our heeding to the petitioner's cry for justice in spite of the earlier
negligence of counsel. As we held in Obut v. Court of Appeals:

[W]e cannot look with favor on a course of action which would place the administration of justice in a straight jacket for then the result
would be a poor kind of justice if there would be justice at all. Verily, judicial orders, such as the one subject of this petition, are issued to
be obeyed, nonetheless a non-compliance is to be dealt with as the circumstances attending the case may warrant. What should guide
judicial action is the principle that a party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense
rather than for him to lose life, liberty, honor or property on technicalities.

The rules of procedure are used only to secure and not override or frustrate justice. A six-day delay in the perfection of the appeal, as in this case,
does not warrant the outright dismissal of the appeal. In Development Bank of the Philippines vs. Court of Appeals, we gave due course to the
 petitioner's appeal despite the late filing of its brief in the appellate court because such appeal involved public interest. We stated in the said case
that the Court may exempt a particular case from a strict application of the rules of procedure where the appellant failed to perfect its appeal within
the reglementary period, resulting in the appellate court's failure to obtain jurisdiction over the case. In Republic vs. Imperial, Jr., we also held that
there is more leeway to exempt a case from the strictness of procedural rules when the appellate court has already obtained jurisdiction over the
appealed case. We emphasize that:

[T]he rules of procedure are mere tools intended to facilitate the attainment of justice, rather than frustrate it. A strict and rigid application
of the rules must always be eschewed when it would subvert the rule's primary objective of enhancing fair trials and expediting justice.
Technicalities should never be used to defeat the substantive rights of the other party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the constraints of technicalities. 60

Moreover, it should be remembered that the Rules were promulgated to set guidelines in the orderly administration of justice, not to shackle the hand that
dispenses it. Otherwise, the courts would be consigned to being mere slaves to technical rules, deprived of their judicial discretion. Technicalities must
take a backseat to substantive rights. After all, it is circumspect leniency in this respect that will give the parties the fullest opportunity to ventilate the merits
of their respective causes, rather than have them lose life, liberty, honor or property on sheer technicalities. 61

The other technical issue posed by respondent is the alleged pro forma nature of MCC's motion for reconsideration, ostensibly because it merely restated
the arguments previously raised and passed upon by the CA.

In this connection, suffice it to say that the mere restatement of arguments in a motion for reconsideration does not per se result in a pro forma motion.
In Security Bank and Trust Company, Inc. v. Cuenca,62 we held that a motion for reconsideration may not be necessarily pro forma even if it reiterates the
arguments earlier passed upon and rejected by the appellate court. A movant may raise the same arguments precisely to convince the court that its ruling
was erroneous. Furthermore, the pro forma rule will not apply if the arguments were not sufficiently passed upon and answered in the decision sought to
be reconsidered.

- II -

The second issue poses a novel question that the Court welcomes. It provides the occasion for this Court to pronounce a definitive interpretation of the
equally innovative provisions of the Electronic Commerce Act of 2000 (R.A. No. 8792) vis-à-vis the Rules on Electronic Evidence.

Although the parties did not raise the question whether the original facsimile transmissions are "electronic data messages" or "electronic documents" within
the context of the Electronic Commerce Act (the petitioner merely assails as inadmissible evidence the photocopies of the said facsimile transmissions),
we deem it appropriate to determine first whether the said fax transmissions are indeed within the coverage of R.A. No. 8792 before ruling on whether the
photocopies thereof are covered by the law. In any case, this Court has ample authority to go beyond the pleadings when, in the interest of justice or for
the promotion of public policy, there is a need to make its own findings in order to support its conclusions. 63

Petitioner contends that the photocopies of the pro forma invoices presented by respondent Ssangyong to prove the perfection of their supposed contract
of sale are inadmissible in evidence and do not fall within the ambit of R.A. No. 8792, because the law merely admits as the best evidence the original fax
transmittal. On the other hand, respondent posits that, from a reading of the law and the Rules on Electronic Evidence, the original facsimile transmittal of
the pro forma invoice is admissible in evidence since it is an electronic document and, therefore, the best evidence under the law and the Rules.
Respondent further claims that the photocopies of these fax transmittals (specifically ST2-POSTS0401-1 and ST2-POSTS0401-2) are admissible under
the Rules on Evidence because the respondent sufficiently explained the non-production of the original fax transmittals.

In resolving this issue, the appellate court ruled as follows:

Admissibility of Pro Forma

Invoices; Breach of Contract
by Appellants

Turning first to the appellants' argument against the admissibility of the Pro Forma Invoices with Reference Nos. ST2-POSTS0401-1 and ST2-
POSTS0401-2 (Exhibits "E", "E-1" and "F", pp. 215-218, Records), appellants argue that the said documents are inadmissible (sic) being violative
of the best evidence rule.

The argument is untenable.

The copies of the said pro-forma invoices submitted by the appellee are admissible in evidence, although they are mere electronic facsimile
printouts of appellant's orders. Such facsimile printouts are considered Electronic Documents under the New Rules on Electronic Evidence, which
came into effect on August 1, 2001. (Rule 2, Section 1 [h], A.M. No. 01-7-01-SC).

"(h) 'Electronic document' refers to information or the representation of information, data, figures, symbols or other modes of written
expression, described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be
proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically. It includes digitally
signed documents and any printout or output, readable by sight or other means, which accurately reflects the electronic data message or
electronic document. For purposes of these Rules, the term 'electronic document' may be used interchangeably with 'electronic data
message'.

An electronic document shall be regarded as the equivalent of an original document under the Best Evidence Rule, as long as it is a printout or
output readable by sight or other means, showing to reflect the data accurately. (Rule 4, Section 1, A.M. No. 01-7-01-SC)

The ruling of the Appellate Court is incorrect. R.A. No. 8792, 64 otherwise known as the Electronic Commerce Act of 2000, considers an electronic data
message or an electronic document as the functional equivalent of a written document for evidentiary purposes. 65 The Rules on Electronic
Evidence66 regards an electronic document as admissible in evidence if it complies with the rules on admissibility prescribed by the Rules of Court and
related laws, and is authenticated in the manner prescribed by the said Rules. 67 An electronic document is also the equivalent of an original document
under the Best Evidence Rule, if it is a printout or output readable by sight or other means, shown to reflect the data accurately. 68
Thus, to be admissible in evidence as an electronic data message or to be considered as the functional equivalent of an original document under the Best
Evidence Rule, the writing must foremost be an "electronic data message" or an "electronic document."

The Electronic Commerce Act of 2000 defines electronic data message and electronic document as follows:

Sec. 5. Definition of Terms. For the purposes of this Act, the following terms are defined, as follows:

xxx

c. "Electronic Data Message" refers to information generated, sent, received or stored by electronic, optical or similar means.

xxx

f. "Electronic Document" refers to information or the representation of information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or produced electronically.

The Implementing Rules and Regulations (IRR) of R.A. No. 8792, 69 which was signed on July 13, 2000 by the then Secretaries of the Department of Trade
and Industry, the Department of Budget and Management, and then Governor of the Bangko Sentral ng Pilipinas, defines the terms as:

Sec. 6. Definition of Terms. For the purposes of this Act and these Rules, the following terms are defined, as follows:

xxx

(e) "Electronic Data Message" refers to information generated, sent, received or stored by electronic, optical or similar means, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy. Throughout these Rules, the term "electronic data message" shall
be equivalent to and be used interchangeably with "electronic document."

xxxx

(h) "Electronic Document" refers to information or the representation of information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or produced electronically. Throughout these Rules, the term "electronic
document" shall be equivalent to and be used interchangeably with "electronic data message."

The phrase "but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy" in the IRR's definition of "electronic data
message" is copied from the Model Law on Electronic Commerce adopted by the United Nations Commission on International Trade Law
(UNCITRAL),70 from which majority of the provisions of R.A. No. 8792 were taken. 71 While Congress deleted this phrase in the Electronic Commerce Act of
2000, the drafters of the IRR reinstated it. The deletion by Congress of the said phrase is significant and pivotal, as discussed hereunder.

The clause on the interchangeability of the terms "electronic data message" and "electronic document" was the result of the Senate of the Philippines'
adoption, in Senate Bill 1902, of the phrase "electronic data message" and the House of Representative's employment, in House Bill 9971, of the term
"electronic document."72 In order to expedite the reconciliation of the two versions, the technical working group of the Bicameral Conference Committee
adopted both terms and intended them to be the equivalent of each one. 73 Be that as it may, there is a slight difference between the two terms. While "data
message" has reference to information electronically sent, stored or transmitted, it does not necessarily mean that it will give rise to a right or extinguish an
obligation,74 unlike an electronic document. Evident from the law, however, is the legislative intent to give the two terms the same construction.

The Rules on Electronic Evidence promulgated by this Court defines the said terms in the following manner:

SECTION 1. Definition of Terms. – For purposes of these Rules, the following terms are defined, as follows:

xxxx

(g) "Electronic data message" refers to information generated, sent, received or stored by electronic, optical or similar means.

(h) "Electronic document" refers to information or the representation of information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or produced electronically. It includes digitally signed documents and print-
out or output, readable by sight or other means, which accurately reflects the electronic data message or electronic document. For purposes of
these Rules, the term "electronic document" may be used interchangeably with "electronic data message."

Given these definitions, we go back to the original question: Is an original printout of a facsimile transmission an electronic data message or electronic
document?

The definitions under the Electronic Commerce Act of 2000, its IRR and the Rules on Electronic Evidence, at first glance, convey the impression
that facsimile transmissions are electronic data messages or electronic documents because they are sent by electronic means. The expanded definition of
an "electronic data message" under the IRR, consistent with the UNCITRAL Model Law, further supports this theory considering that the enumeration "xxx
[is] not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." And to telecopy is to send a document from one place to
another via a fax machine.75

As further guide for the Court in its task of statutory construction, Section 37 of the Electronic Commerce Act of 2000 provides that

Unless otherwise expressly provided for, the interpretation of this Act shall give due regard to its international origin and the need to promote
uniformity in its application and the observance of good faith in international trade relations. The generally accepted principles of international law
and convention on electronic commerce shall likewise be considered.
Obviously, the "international origin" mentioned in this section can only refer to the UNCITRAL Model Law, and the UNCITRAL's definition of "data
message":

"Data message" means information generated, sent, received or stored by electronic, optical or similar means including, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.76

is substantially the same as the IRR's characterization of an "electronic data message."

However, Congress deleted the phrase, "but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy," and replaced the
term "data message" (as found in the UNCITRAL Model Law ) with "electronic data message." This legislative divergence from what is assumed as the
term's "international origin" has bred uncertainty and now impels the Court to make an inquiry into the true intent of the framers of the law. Indeed, in the
construction or interpretation of a legislative measure, the primary rule is to search for and determine the intent and spirit of the law. 77 A construction
should be rejected that gives to the language used in a statute a meaning that does not accomplish the purpose for which the statute was enacted, and
that tends to defeat the ends which are sought to be attained by the enactment. 78

Interestingly, when Senator Ramon B. Magsaysay, Jr., the principal author of Senate Bill 1902 (the predecessor of R.A. No. 8792), sponsored the bill on
second reading, he proposed to adopt the term "data message" as formulated and defined in the UNCITRAL Model Law. 79 During the period of
amendments, however, the term evolved into "electronic data message," and the phrase "but not limited to, electronic data interchange (EDI), electronic
mail, telegram, telex or telecopy" in the UNCITRAL Model Law was deleted. Furthermore, the term "electronic data message," though maintaining its
description under the UNCITRAL Model Law, except for the aforesaid deleted phrase, conveyed a different meaning, as revealed in the following
proceedings:

xxxx

Senator Santiago. Yes, Mr. President. I will furnish a copy together with the explanation of this proposed amendment.

And then finally, before I leave the Floor, may I please be allowed to go back to Section 5; the Definition of Terms. In light of the acceptance by the
good Senator of my proposed amendments, it will then become necessary to add certain terms in our list of terms to be defined. I would like to add
a definition on what is "data," what is "electronic record" and what is an "electronic record system."

If the gentleman will give me permission, I will proceed with the proposed amendment on Definition of Terms, Section 5.

Senator Magsaysay. Please go ahead, Senator Santiago.

Senator Santiago. We are in Part 1, short title on the Declaration of Policy, Section 5, Definition of Terms.
At the appropriate places in the listing of these terms that have to be defined since these are arranged alphabetically, Mr. President, I would like to
insert the term DATA and its definition. So, the amendment will read: "DATA" MEANS REPRESENTATION, IN ANY FORM, OF INFORMATION
OR CONCEPTS.

The explanation is this: This definition of "data" or "data" as it is now fashionably pronounced in America - - the definition of "data" ensures that our
bill applies to any form of information in an electronic record, whether these are figures, facts or ideas.

So again, the proposed amendment is this: "DATA" MEANS REPRESENTATIONS, IN ANY FORM, OF INFORMATION OR CONCEPTS.

Senator Magsaysay. May I know how will this affect the definition of "Data Message" which encompasses electronic records, electronic writings
and electronic documents?

Senator Santiago. These are completely congruent with each other. These are compatible. When we define "data," we are simply reinforcing the
definition of what is a data message.

Senator Magsaysay. It is accepted, Mr. President.

Senator Santiago. Thank you. The next term is "ELECTRONIC RECORD." The proposed amendment is as follows:

"ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR STORED ON ANY MEDIUM IN OR BY A COMPUTER SYSTEM OR
OTHER SIMILAR DEVICE, THAT CAN BE READ OR PERCEIVED BY A PERSON OR A COMPUTER SYSTEM OR OTHER SIMILAR DEVICE.
IT INCLUDES A DISPLAY, PRINTOUT OR OTHER OUTPUT OF THAT DATA.

The explanation for this term and its definition is as follows: The term "ELECTRONIC RECORD" fixes the scope of our bill. The record is the data.
The record may be on any medium. It is electronic because it is recorded or stored in or by a computer system or a similar device.

The amendment is intended to apply, for example, to data on magnetic strips on cards or in Smart cards. As drafted, it would not apply to
telexes or faxes, except computer-generated faxes, unlike the United Nations model law on electronic commerce. It would also not apply
to regular digital telephone conversations since the information is not recorded. It would apply to voice mail since the information has been
recorded in or by a device similar to a computer. Likewise, video records are not covered. Though when the video is transferred to a website, it
would be covered because of the involvement of the computer. Music recorded by a computer system on a compact disc would be covered.

In short, not all data recorded or stored in digital form is covered. A computer or a similar device has to be involved in its creation or storage. The
term "similar device" does not extend to all devices that create or store data in digital form. Although things that are not recorded or preserved by
or in a computer system are omitted from this bill, these may well be admissible under other rules of law. This provision focuses on replacing the
search for originality proving the reliability of systems instead of that of individual records and using standards to show systems reliability.
 Paper records that are produced directly by a computer system such as printouts are themselves electronic records being just the means of
intelligible display of the contents of the record. Photocopies of the printout would be paper record subject to the usual rules about copies, but the
original printout would be subject to the rules of admissibility of this bill.

However, printouts that are used only as paper records and whose computer origin is never again called on are treated as paper records. In that
case, the reliability of the computer system that produces the record is irrelevant to its reliability.

Senator Magsaysay. Mr. President, if my memory does not fail me, earlier, the lady Senator accepted that we use the term "Data Message" rather
than "ELECTRONIC RECORD" in being consistent with the UNCITRAL term of "Data Message." So with the new amendment of defining
"ELECTRONIC RECORD," will this affect her accepting of the use of "Data Message" instead of "ELECTRONIC RECORD"?

Senator Santiago. No, it will not. Thank you for reminding me. The term I would like to insert is ELECTRONIC DATA MESSAGE in lieu of
"ELECTRONIC RECORD."

Senator Magsaysay. Then we are, in effect, amending the term of the definition of "Data Message" on page 2A, line 31, to which we have
no objection.

Senator Santiago. Thank you, Mr. President.

xxxx

Senator Santiago. Mr. President, I have proposed all the amendments that I desire to, including the amendment on the effect of error or change. I
will provide the language of the amendment together with the explanation supporting that amendment to the distinguished sponsor and then he
can feel free to take it up in any session without any further intervention.

Senator Magsaysay. Before we end, Mr. President, I understand from the proponent of these amendments that these are based on the Canadian
E-commerce Law of 1998. Is that not right?

Senator Santiago. That is correct.80

Thus, when the Senate consequently voted to adopt the term "electronic data message," it was consonant with the explanation of Senator Miriam
Defensor-Santiago that it would not apply "to telexes or  faxes, except computer-generated faxes, unlike the United Nations model law on electronic
commerce." In explaining the term "electronic record" patterned after the E-Commerce Law of Canada, Senator Defensor-Santiago had in mind the term
"electronic data message." This term then, while maintaining part of the UNCITRAL Model Law's terminology of "data message," has assumed a different
context, this time, consonant with the term "electronic record" in the law of Canada. It accounts for the addition of the word "electronic" and the deletion of
the phrase "but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." Noteworthy is that the Uniform Law
Conference of Canada, explains the term "electronic record," as drafted in the Uniform Electronic Evidence Act, in a manner strikingly similar to Sen.
Santiago's explanation during the Senate deliberations:
 "Electronic record" fixes the scope of the Act. The record is the data. The record may be any medium. It is "electronic" because it is recorded or
stored in or by a computer system or similar device. The Act is intended to apply, for example, to data on magnetic strips on cards, or in smart
cards. As drafted, it would not apply to telexes or faxes (except computer-generated faxes), unlike the United Nations Model Law on Electronic
Commerce. It would also not apply to regular digital telephone conversations, since the information is not recorded. It would apply to voice mail,
since the information has been recorded in or by a device similar to a computer. Likewise video records are not covered, though when the video is
transferred to a Web site it would be, because of the involvement of the computer. Music recorded by a computer system on a compact disk would
be covered.

In short, not all data recorded or stored in "digital" form is covered. A computer or similar device has to be involved in its creation or storage. The
term "similar device" does not extend to all devices that create or store data in digital form. Although things that are not recorded or preserved by
or in a computer system are omitted from this Act, they may well be admissible under other rules of law. This Act focuses on replacing the search
for originality, proving the reliability of systems instead of that of individual records, and using standards to show systems reliability.

Paper records that are produced directly by a computer system, such as printouts, are themselves electronic records, being just the means of
intelligible display of the contents of the record. Photocopies of the printout would be paper records subject to the usual rules about copies, but the
"original" printout would be subject to the rules of admissibility of this Act.

However, printouts that are used only as paper records, and whose computer origin is never again called on, are treated as paper records. See
subsection 4(2). In this case the reliability of the computer system that produced the record is relevant to its reliability. 81

There is no question then that when Congress formulated the term "electronic data message," it intended the same meaning as the term "electronic
record" in the Canada law. This construction of the term "electronic data message," which excludes telexes or faxes, except computer-generated faxes, is
in harmony with the Electronic Commerce Law's focus on "paperless" communications and the "functional equivalent approach" 82 that it espouses. In fact,
the deliberations of the Legislature are replete with discussions on paperless and digital transactions.

Facsimile transmissions are not, in this sense, "paperless," but verily are paper-based.

A facsimile machine, which was first patented in 1843 by Alexander Bain, 83 is a device that can send or receive pictures and text over a telephone line. It
works by digitizing an image—dividing it into a grid of dots. Each dot is either on or off, depending on whether it is black or white. Electronically, each dot is
represented by a bit that has a value of either 0 (off) or 1 (on). In this way, the fax machine translates a picture into a series of zeros and ones (called a bit
map) that can be transmitted like normal computer data. On the receiving side, a fax machine reads the incoming data, translates the zeros and ones back
into dots, and reprints the picture.84 A fax machine is essentially an image scanner, a modem and a computer printer combined into a highly specialized
package. The scanner converts the content of a physical document into a digital image, the modem sends the image data over a phone line, and the
printer at the other end makes a duplicate of the original document. 85 Thus, in Garvida v. Sales, Jr.,86 where we explained the unacceptability of filing
pleadings through fax machines, we ruled that:

A facsimile or fax transmission is a process involving the transmission and reproduction of printed and graphic matter by scanning an original
copy, one elemental area at a time, and representing the shade or tone of each area by a specified amount of electric current. The current is
transmitted as a signal over regular telephone lines or via microwave relay and is used by the receiver to reproduce an image of the elemental
 area in the proper position and the correct shade. The receiver is equipped with a stylus or other device that produces a printed record on paper
referred to as a facsimile.

x x x A facsimile is not a genuine and authentic pleading. It is, at best, an exact copy preserving all the marks of an original. Without the original,
there is no way of determining on its face whether the facsimile pleading is genuine and authentic and was originally signed by the party and his
counsel. It may, in fact, be a sham pleading.87

Accordingly, in an ordinary facsimile transmission, there exists an original paper-based information or data that is scanned, sent through a phone line, and
re-printed at the receiving end. Be it noted that in enacting the Electronic Commerce Act of 2000, Congress intended virtual or paperless writings to be
the functional equivalent and to have the same legal function as paper-based documents.88 Further, in a virtual or paperless environment, technically, there
is no original copy to speak of, as all direct printouts of the virtual reality are the same, in all respects, and are considered as originals. 89 Ineluctably, the
law's definition of "electronic data message," which, as aforesaid, is interchangeable with "electronic document," could not have included facsimile
transmissions, which have an original paper-based copy as sent and a paper-based facsimile copy as received. These two copies are distinct from each
other, and have different legal effects. While Congress anticipated future developments in communications and computer technology 90 when it drafted the
law, it excluded the early forms of technology, like telegraph, telex and telecopy (except computer-generated faxes, which is a newer development as
compared to the ordinary fax machine to fax machine transmission), when it defined the term "electronic data message."

Clearly then, the IRR went beyond the parameters of the law when it adopted verbatim the UNCITRAL Model Law's definition of "data message," without
considering the intention of Congress when the latter deleted the phrase "but not limited to, electronic data interchange (EDI), electronic mail, telegram,
telex or telecopy." The inclusion of this phrase in the IRR offends a basic tenet in the exercise of the rule-making power of administrative agencies. After
all, the power of administrative officials to promulgate rules in the implementation of a statute is necessarily limited to what is found in the legislative
enactment itself. The implementing rules and regulations of a law cannot extend the law or expand its coverage, as the power to amend or repeal a statute
is vested in the Legislature.91 Thus, if a discrepancy occurs between the basic law and an implementing rule or regulation, it is the former that prevails,
because the law cannot be broadened by a mere administrative issuance—an administrative agency certainly cannot amend an act of Congress. 92 Had the
Legislature really wanted ordinary fax transmissions to be covered by the mantle of the Electronic Commerce Act of 2000, it could have easily lifted without
a bit of tatter the entire wordings of the UNCITRAL Model Law.

Incidentally, the National Statistical Coordination Board Task Force on the Measurement of E-Commerce, 93 on November 22, 2006, recommended a
working definition of "electronic commerce," as "[a]ny commercial transaction conducted through electronic, optical and similar medium, mode,
instrumentality and technology. The transaction includes the sale or purchase of goods and services, between individuals, households, businesses and
governments conducted over computer-mediated networks through the Internet, mobile phones, electronic data interchange (EDI) and other channels
through open and closed networks." The Task Force's proposed definition is similar to the Organization of Economic Cooperation and Development's
(OECD's) broad definition as it covers transactions made over any network, and, in addition, it adopted the following provisions of the OECD definition: (1)
for transactions, it covers sale or purchase of goods and services; (2) for channel/network, it considers any computer-mediated network and NOT limited to
Internet alone; (3) it excludes transactions received/placed using fax, telephone or non-interactive mail; (4) it considers payments done online or offline;
and (5) it considers delivery made online (like downloading of purchased books, music or software programs) or offline (deliveries of goods). 94
We, therefore, conclude that the terms "electronic data message" and "electronic document," as defined under the Electronic Commerce Act of 2000, do
not include a facsimile transmission. Accordingly, a facsimile transmission cannot be considered as electronic evidence. It is not the functional equivalent
of an original under the Best Evidence Rule and is not admissible as electronic evidence.

Since a facsimile transmission is not an "electronic data message" or an "electronic document," and cannot be considered as electronic evidence by the
Court, with greater reason is a photocopy of such a fax transmission not electronic evidence. In the present case, therefore, Pro Forma Invoice Nos. ST2-
POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"), which are mere photocopies of the original fax transmittals, are not electronic evidence,
contrary to the position of both the trial and the appellate courts.

- III -

Nevertheless, despite the pro forma invoices not being electronic evidence, this Court finds that respondent has proven by preponderance of evidence the
existence of a perfected contract of sale.

In an action for damages due to a breach of a contract, it is essential that the claimant proves (1) the existence of a perfected contract, (2) the breach
thereof by the other contracting party and (3) the damages which he/she sustained due to such breach. Actori incumbit onus probandi. The burden of proof
rests on the party who advances a proposition affirmatively. 95 In other words, a plaintiff in a civil action must establish his case by a preponderance of
evidence, that is, evidence that has greater weight, or is more convincing than that which is offered in opposition to it. 96

In general, contracts are perfected by mere consent, 97 which is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. 98 They are, moreover, obligatory in whatever form they may
have been entered into, provided all the essential requisites for their validity are present. 99 Sale, being a consensual contract, follows the general rule that
it is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price. From that moment, the
parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. 100

The essential elements of a contract of sale are (1) consent or meeting of the minds, that is, to transfer ownership in exchange for the price, (2) object
certain which is the subject matter of the contract, and (3) cause of the obligation which is established. 101

In this case, to establish the existence of a perfected contract of sale between the parties, respondent Ssangyong formally offered in evidence the
testimonies of its witnesses and the following exhibits:

Exhibit Description Purpose

E Pro forma Invoice dated 17 April To show that defendants contracted with
2000 with Contract No. ST2- plaintiff for the delivery of 110 MT of
POSTS0401-1, photocopy stainless steel from Korea payable by way
of an irrevocable letter of credit in favor of
plaintiff, among other conditions.
E-1 Pro forma Invoice dated 17 April To show that defendants sent their
 2000 with Contract No. ST2- confirmation of the (i) delivery to it of the
POSTS0401, contained in specified stainless steel products, (ii)
facsimile/thermal paper faxed by defendants' payment thereof by way of an
defendants to plaintiff showing irrevocable letter of credit in favor of
the printed transmission details plaintiff, among other conditions.
on the upper portion of said
paper as coming from defendant
MCC on 26 Apr 00 08:41AM
E-2 Conforme signature of Mr. To show that defendants sent their
Gregory Chan, contained in confirmation of the (i) delivery to it of the
facsimile/thermal paper faxed by total of 220MT specified stainless steel
defendants to plaintiff showing products, (ii) defendants' payment thereof
the printed transmission details by way of an irrevocable letter of credit in
on the upper portion of said favor of plaintiff, among other conditions.
paper as coming from defendant
MCC on 26 Apr 00 08:41AM
F Pro forma Invoice dated 17 April To show that defendants contracted with
2000 with Contract No. ST2- plaintiff for delivery of another 110 MT of
POSTSO401-2, photocopy stainless steel from Korea payable by way
of an irrevocable letter of credit in favor of
plaintiff, among other conditions.
G Letter to defendant SANYO To prove that defendants were informed of
SEIKE dated 20 June the date of L/C opening and
2000, contained in defendant's conforme/approval thereof.
facsimile/thermal paper
G-1 Signature of defendant Gregory
Chan, contained in
facsimile/thermal paper.
H Letter to defendants dated 22 To prove that defendants were informed of
June 2000, original the successful price adjustments secured
by plaintiff in favor of former and were
advised of the schedules of its L/C
opening.
I Letter to defendants dated 26 To prove that plaintiff repeatedly
June 2000, original requested defendants for the agreed
J Letter to defendants dated 26 opening of the Letters of Credit,
June 2000, original defendants' failure and refusal to comply
with their obligations and the problems of
K Letter to defendants dated 27
 June 2000, original
L Facsimile message to defendants
plaintiff is incurring by reason of
dated 28 June 2000, photocopy
defendants' failure and refusal to open the
M Letter from defendants dated 29 To prove that defendants admit of their
June 2000, contained in liabilities to plaintiff, that they requested
facsimile/thermal paper faxed by for "more extension" of time for the
defendants to plaintiff showing opening of the Letter of Credit, and
the printed transmission details begging for favorable understanding and
on the upper portion of said consideration.
paper as coming from defendant
MCC on 29 June 00 11:12 AM
M-1 Signature of defendant Gregory  
Chan, contained in
facsimile/thermal paper faxed by
defendants to plaintiff showing
the printed transmission details
on the upper portion of said
paper as coming from defendant
MCC on June 00 11:12 AM
N Letter to defendants dated 29  
June 2000, original
O Letter to defendants dated 30 To prove that plaintiff reiterated its request
June 2000, photocopy for defendants to L/C opening after the
latter's request for extension of time was
granted, defendants' failure and refusal to
comply therewith extension of time
notwithstanding.
P Letter to defendants dated 06  
July 2000, original
Q Demand letter to defendants To prove that plaintiff was constrained to
dated 15 Aug 2000, original engaged services of a lawyer for collection
efforts.
R Demand letter to defendants To prove that defendants opened the first
dated 23 Aug 2000, original L/C in favor of plaintiff, requested for
further postponement of the final L/C and
for minimal amounts, were urged to open
the final L/C on time, and were informed
that failure to comply will cancel the
 contract.
S Demand letter to defendants To show defendants' refusal and failure to
dated 11 Sept 2000, original open the final L/C on time, the
cancellation of the contract as a
consequence thereof, and final demand
upon defendants to remit its obligations.
W Letter from plaintiff SSANGYONG To prove that there was a perfected sale
to defendant SANYO SEIKI dated and purchase agreement between the
13 April 2000, with fax back from parties for 220 metric tons of steel
defendants SANYO SEIKI/MCC products at the price of US$1,860/ton.
to plaintiff
SSANGYONG, contained in
facsimile/thermal paper with
back-up photocopy
W-1 Conforme signature of defendant To prove that defendants, acting through
Gregory Chan, contained in Gregory Chan, agreed to the sale and
facsimile/thermal paper with purchase of 220 metric tons of steel
back-up photocopy products at the price of US$1,860/ton.
W-2 Name of sender MCC Industrial To prove that defendants sent their
Sales Corporation conformity to the sale and purchase
agreement by facsimile transmission.
X Pro forma Invoice dated 16 To prove that defendant MCC agreed to
August 2000, photocopy adjust and split the confirmed purchase
order into 2 shipments at 100 metric tons
each at the discounted price of
US$1,700/ton.
X-1 Notation "1/2", photocopy To prove that the present Pro forma
Invoice was the first of 2 pro forma
invoices.
X-2 Ref. No. ST2-POSTS080- To prove that the present Pro
1, photocopy forma Invoice was the first of 2 pro
forma invoices.
X-3 Conforme signature of defendant To prove that defendant MCC, acting
Gregory Chan, photocopy through Gregory Chan, agreed to the sale
and purchase of the balance of 100 metric
tons at the discounted price of
US$1,700/ton, apart from the other order
and shipment of 100 metric tons which
 was delivered by plaintiff SSANGYONG
and paid for by defendant MCC.
DD Letter from defendant MCC to To prove that there was a perfected sale
plaintiff SSANGYONG dated 22 and purchase agreement between plaintiff
August 2000, contained in SSANGYONG and defendant MCC for the
facsimile/thermal paper with balance of 100 metric tons, apart from the
back-up photocopy other order and shipment of 100 metric
tons which was delivered by plaintiff
SSANGYONG and paid for by defendant
MCC.
DD-1 Ref. No. ST2-POSTS080- To prove that there was a perfected sale
1, contained in facsimile/thermal and purchase agreement between plaintiff
paper with back-up photocopy SSANGYONG and defendant MCC for the
balance of 100 metric tons, apart from the
other order and shipment of 100 metric
tons which was delivered by plaintiff
SSANGYONG and paid for by defendant
MCC.
DD-2 Signature of defendant Gregory To prove that defendant MCC, acting
Chan, contained in through Gregory Chan, agreed to the sale
facsimile/thermal paper with and purchase of the balance of 100 metric
back-up photocopy tons, apart from the other order and
shipment of 100 metric tons which was
delivered by plaintiff Ssangyong and paid
for by defendant MCC.102

Significantly, among these documentary evidence presented by respondent, MCC, in its petition before this Court, assails the admissibility only of Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"). After sifting through the records, the Court found that these
invoices are mere photocopies of their original fax transmittals. Ssangyong avers that these documents were prepared after MCC asked for the splitting
of the original order into two, so that the latter can apply for an L/C with greater facility. It, however, failed to explain why the originals of these documents
were not presented.

To determine whether these documents are admissible in evidence, we apply the ordinary Rules on Evidence, for as discussed above we cannot apply the
Electronic Commerce Act of 2000 and the Rules on Electronic Evidence.

Because these documents are mere photocopies, they are simply secondary evidence, admissible only upon compliance with Rule 130, Section 5, which
states, "[w]hen the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and
the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or
by the testimony of witnesses in the order stated." Furthermore, the offeror of secondary evidence must prove the predicates thereof, namely: (a) the loss
or destruction of the original without bad faith on the part of the proponent/offeror which can be shown by circumstantial evidence of routine practices of
destruction of documents; (b) the proponent must prove by a fair preponderance of evidence as to raise a reasonable inference of the loss or destruction
of the original copy; and (c) it must be shown that a diligent and bona fide but unsuccessful search has been made for the document in the proper place or
places. It has been held that where the missing document is the foundation of the action, more strictness in proof is required than where the document is
only collaterally involved.103

Given these norms, we find that respondent failed to prove the existence of the original fax transmissions of Exhibits E and F, and likewise did not
sufficiently prove the loss or destruction of the originals. Thus, Exhibits E and F cannot be admitted in evidence and accorded probative weight.

It is observed, however, that respondent Ssangyong did not rely merely on Exhibits E and F to prove the perfected contract. It also introduced in evidence
a variety of other documents, as enumerated above, together with the testimonies of its witnesses. Notable among them are Pro Forma Invoice Nos. ST2-
POSTS080-1 and ST2-POSTS080-2 which were issued by Ssangyong and sent via fax to MCC. As already mentioned, these invoices slightly varied the
terms of the earlier invoices such that the quantity was now officially 100MT per invoice and the price reduced to US$1,700.00 per MT. The copies of the
said August 16, 2000 invoices submitted to the court bear the conformity signature of MCC Manager Chan.

Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is a mere photocopy of its original. But then again, petitioner MCC does not assail the
admissibility of this document in the instant petition. Verily, evidence not objected to is deemed admitted and may be validly considered by the court in
arriving at its judgment.104 Issues not raised on appeal are deemed abandoned.

As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and "2-C"), which was certified by PCIBank as a true copy of its original, 105 it was, in fact,
petitioner MCC which introduced this document in evidence. Petitioner MCC paid for the order stated in this invoice. Its admissibility, therefore, is not open
to question.

These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2-POSTS080-2), along with the other unchallenged documentary evidence of respondent
Ssangyong, preponderate in favor of the claim that a contract of sale was perfected by the parties.

This Court also finds merit in the following observations of the trial court:

Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R") referring to Pro Forma Invoice for Contract No. ST2POSTS080-2, in the
amount of US$170,000.00, and which bears the signature of Gregory Chan, General Manager of MCC. Plaintiff, on the other hand, presented Pro
Forma Invoice referring to Contract No. ST2-POSTS080-1, in the amount of US$170,000.00, which likewise bears the signature of Gregory Chan,
MCC. Plaintiff accounted for the notation "1/2" on the right upper portion of the Invoice, that is, that it was the first of two (2) pro forma invoices
covering the subject contract between plaintiff and the defendants. Defendants, on the other hand, failed to account for the notation "2/2" in its Pro
Forma Invoice (Exhibit "1-A"). Observably further, both Pro Forma Invoices bear the same date and details, which logically mean that they both
apply to one and the same transaction.106

Indeed, why would petitioner open an L/C for the second half of the transaction if there was no first half to speak of?
The logical chain of events, as gleaned from the evidence of both parties, started with the petitioner and the respondent agreeing on the sale and
purchase of 220MT of stainless steel at US$1,860.00 per MT. This initial contract was perfected. Later, as petitioner asked for several extensions to pay,
adjustments in the delivery dates, and discounts in the price as originally agreed, the parties slightly varied the terms of their contract, without necessarily
novating it, to the effect that the original order was reduced to 200MT, split into two deliveries, and the price discounted to US$1,700 per MT. Petitioner,
however, paid only half of its obligation and failed to open an L/C for the other 100MT. Notably, the conduct of both parties sufficiently established the
existence of a contract of sale, even if the writings of the parties, because of their contested admissibility, were not as explicit in establishing a
contract.107 Appropriate conduct by the parties may be sufficient to establish an agreement, and while there may be instances where the exchange of
correspondence does not disclose the exact point at which the deal was closed, the actions of the parties may indicate that a binding obligation has been
undertaken.108

With our finding that there is a valid contract, it is crystal-clear that when petitioner did not open the L/C for the first half of the transaction (100MT), despite
numerous demands from respondent Ssangyong, petitioner breached its contractual obligation. It is a well-entrenched rule that the failure of a buyer to
furnish an agreed letter of credit is a breach of the contract between buyer and seller. Indeed, where the buyer fails to open a letter of credit as stipulated,
the seller or exporter is entitled to claim damages for such breach. Damages for failure to open a commercial credit may, in appropriate cases, include the
loss of profit which the seller would reasonably have made had the transaction been carried out. 109

- IV -

This Court, however, finds that the award of actual damages is not in accord with the evidence on record. It is axiomatic that actual or compensatory
damages cannot be presumed, but must be proven with a reasonable degree of certainty. 110 In Villafuerte v. Court of Appeals,111 we explained that:

Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered. They arise out of a sense of
natural justice and are aimed at repairing the wrong done. Except as provided by law or by stipulation, a party is entitled to an adequate
compensation only for such pecuniary loss as he has duly proven. It is hornbook doctrine that to be able to recover actual damages, the claimant
bears the onus of presenting before the court actual proof of the damages alleged to have been suffered, thus:

A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him as he has duly proved. Such damages, to
be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. We have
emphasized that these damages cannot be presumed and courts, in making an award must point out specific facts which could afford a
basis for measuring whatever compensatory or actual damages are borne. 112

In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87 as actual damages. On appeal, the same was affirmed by the
appellate court. Noticeably, however, the trial and the appellate courts, in making the said award, relied on the following documents submitted in evidence
by the respondent: (1) Exhibit "U," the Statement of Account dated March 30, 2001; (2) Exhibit "U-1," the details of the said Statement of Account); (3)
Exhibit "V," the contract of the alleged resale of the goods to a Korean corporation; and (4) Exhibit "V-1," the authentication of the resale contract from the
Korean Embassy and certification from the Philippine Consular Office.

The statement of account and the details of the losses sustained by respondent due to the said breach are, at best, self-serving. It was respondent
Ssangyong itself which prepared the said documents. The items therein are not even substantiated by official receipts. In the absence of corroborative
evidence, the said statement of account is not sufficient basis to award actual damages. The court cannot simply rely on speculation, conjecture or
guesswork as to the fact and amount of damages, but must depend on competent proof that the claimant had suffered, and on evidence of, the actual
amount thereof.113

Furthermore, the sales contract and its authentication certificates, Exhibits "V" and "V-1," allegedly evidencing the resale at a loss of the stainless steel
subject of the parties' breached contract, fail to convince this Court of the veracity of its contents. The steel items indicated in the sales contract 114 with a
Korean corporation are different in all respects from the items ordered by petitioner MCC, even in size and quantity. We observed the following
discrepancies:

List of commodities as stated in Exhibit "V":

COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge

SPEC: SUS304 NO. 1
SIZE/Q'TY:
2.8MM X 1,219MM X C 8.193MT
3.0MM X 1,219MM X C 7.736MT
3.0MM X 1,219MM X C 7.885MT
3.0MM X 1,219MM X C 8.629MT
4.0MM X 1,219MM X C 7.307MT
4.0MM X 1,219MM X C 7.247MT
4.5MM X 1,219MM X C 8.450MT
4.5MM X 1,219MM X C 8.870MT
5.0MM X 1,219MM X C 8.391MT
6.0MM X 1,219MM X C 6.589MT
6.0MM X 1,219MM X C 7.878MT
6.0MM X 1,219MM X C 8.397MT
TOTAL: 95.562MT115

List of commodities as stated in Exhibit "X" (the invoice that was not paid):

DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304

SIZE AND QUANTITY:
2.6 MM X 4' X C 10.0MT
3.0 MM X 4' X C 25.0MT
 4.0 MM X 4' X C 15.0MT
4.5 MM X 4' X C 15.0MT
5.0 MM X 4' X C 10.0MT
6.0 MM X 4' X C 25.0MT
TOTAL: 100MT116

From the foregoing, we find merit in the contention of MCC that Ssangyong did not adequately prove that the items resold at a loss were the same items
ordered by the petitioner. Therefore, as the claim for actual damages was not proven, the Court cannot sanction the award.

Nonetheless, the Court finds that petitioner knowingly breached its contractual obligation and obstinately refused to pay despite repeated demands from
respondent. Petitioner even asked for several extensions of time for it to make good its obligation. But in spite of respondent's continuous accommodation,
petitioner completely reneged on its contractual duty. For such inattention and insensitivity, MCC must be held liable for nominal damages. "Nominal
damages are 'recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss
of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be
shown.'"117 Accordingly, the Court awards nominal damages of P200,000.00 to respondent Ssangyong.

As to the award of attorney's fees, it is well settled that no premium should be placed on the right to litigate and not every winning party is entitled to an
automatic grant of attorney's fees. The party must show that he falls under one of the instances enumerated in Article 2208 of the Civil Code. 118 In the
instant case, however, the Court finds the award of attorney's fees proper, considering that petitioner MCC's unjustified refusal to pay has compelled
respondent Ssangyong to litigate and to incur expenses to protect its rights.

WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 82983
is MODIFIED in that the award of actual damages is DELETED. However, petitioner is ORDERED to pay respondent NOMINAL DAMAGES in the amount
of P200,000.00, and the ATTORNEY'S FEES as awarded by the trial court.

SO ORDERED.