MCC Industrial Sales Corp. vs. Ssangyong Corp.

G.R. No. 170633     October 17, 2007

Nachura, J.     Third Division

Facts:

            Petitioner MCC Industrial Sales (MCC) is engaged in the business of importing and wholesaling stainless steel products. One of its suppliers is the Ssangyong Corporation (Ssangyong), an international trading company. The two corporations conducted business through telephone calls and facsimile or telecopy transmissions.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.

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, 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 alleging that Ssangyong failed to present the original copies of the pro forma invoices on which the civil action was based.

The RTC, however, excluded Sanyo Seiki from liability for lack of competent evidence.

On August 31, 2005, the CA rendered its Decision 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.

Issue:

Whether or not photocopies of facsimile printouts are admissible in evidence.

Ruling:

            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."

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. In this case the reliability of the computer system that produced the record is relevant to its reliability.

Thus, in Garvida v. Sales, Jr., where we explained the unacceptability of filing pleadings through fax machines, we ruled that:

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.

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. 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. 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 anoriginal paper-based copy as sent and a paper-based facsimile copy as received.

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 transmissioncannot 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.