Page |1
G.R. No. 143439. October 14, 2005.*
MAXIMO ALVAREZ, petitioner, vs. SUSAN RAMIREZ, respondent.
Remedial Law; Evidence; Witnesses; Words and Phrases; Marital
Disqualification; During their marriage, neither the husband nor the
wife may testify for or against the other without the consent of the
affected spouse, except in a civil case by one against the other, or in
a criminal case for a crime committed by one against the other or the
latter’s direct descendants or ascendants.—Section 22, Rule 130 of
the Revised Rules of Court provides: “Sec. 22. Disqualification by
reason of marriage.—During their marriage, neither the husband nor
the wife may testify for or against the other without the consent of
the affected spouse, except in a civil case by one against the other, or
in a criminal case for a crime committed by one against the other or
the latter’s direct descendants or ascendants.” The reasons given for
the rule are: 1. There is identity of interests between husband and
wife; 2. If one were to testify for or against the other, there is
consequent danger of perjury; 3. The policy of the law is to guard the
security and confidences of private life, even at the risk of an
occasional failure of justice, and to prevent domestic disunion and
unhappiness; and 4. Where there is want of domestic tranquility
there is danger of punishing one spouse through the hostile testimony
of the other. Alvarez vs. Ramirez, 473 SCRA 72, G.R. No. 143439
October 14, 2005
Before us is a petition for review on certiorari[1] assailing the
Decision[2] of the Court of Appeals dated May 31, 2000 in CA-G.R. SP
No. 56154, entitled SUSAN RAMIREZ, petitioner, versus, HON.
BENJAMIN M. AQUINO, JR., as JUDGE RTC, MALABON, MM, BR. 72,
and MAXIMO ALVAREZ, respondents.
Susan Ramirez, herein respondent, is the complaining witness in
Criminal Case No. 19933-MN for arson[3] pending before the Regional
Trial Court, Branch 72, Malabon City. The accused is Maximo Alvarez,
herein petitioner. He is the husband of Esperanza G. Alvarez, sister of
respondent.
On June 21, 1999, the private prosecutor called Esperanza Alvarez to
the witness stand as the first witness against petitioner, her husband.
Petitioner and his counsel raised no objection.
Esperanza testified as follows:
ATTY. ALCANTARA:
We are calling Mrs. Esperanza
Alvarez, the wife of the accused, Your Honor.
COURT:
Swear in the witness.
xxx
ATTY. MESIAH: (sic)
Your Honor, we are offering the
testimony of this witness for the purpose of
proving that the accused Maximo Alvarez
committed all the elements of the crime being
charged particularly that accused Maximo Alvarez
pour on May 29, 1998 gasoline in the house
located at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan,
Navotas, Metro Manila, the house owned by his
sister-in-law Susan Ramirez; that accused
Maximo Alvarez after pouring the gasoline on the
door of the house of Susan Ramirez ignited and
set it on fire; that the accused at the time he
successfully set the house on fire (sic) of Susan
Ramirez knew that it was occupied by Susan
Ramirez, the members of the family as well
as Esperanza Alvarez, the estranged wife of the
accused; that as a consequence of the accused in
successfully setting the fire to the house of Susan
Ramirez, the door of said house was burned and
together with several articles of the house,
including shoes, chairs and others.
COURT:
You may proceed.
xxx
DIRECT EXAMINATION
ATTY. ALCANTARA:
xxx
Q: When you were able to find the source,
incidentally what was the source of that
scent?
A: When I stand by the window, sir, I saw a man
pouring the gasoline in the house of my
sister (and witness pointing to the
person of the accused inside the court
room).
Q: For the record, Mrs. Witness, can you state the
name of that person, if you know?
A: He is my husband, sir, Maximo Alvarez.
Q: If that Maximo Alvarez you were able to see,
can you identify him?
A: Yes, sir.
Q: If you can see him inside the Court room, can
you please point him?
A: Witness pointing to a person and when asked
to stand and asked his name, he gave
his name as Maximo Alvarez.[4]
In the course of Esperanzas direct testimony against
petitioner, the latter showed uncontrolled emotions, prompting the
trial judge to suspend the proceedings.

On June 30, 1999, petitioner, through counsel, filed a motion[5] to
disqualify Esperanza from testifying against him pursuant to Rule 130
of the Revised Rules of Court on marital disqualification.
Respondent filed an opposition[6] to the motion. Pending resolution
of the motion, the trial court directed the prosecution to proceed with
the presentation of the other witnesses.
On September 2, 1999, the trial court issued the questioned Order
disqualifying Esperanza Alvarez from further testifying and deleting
her testimony from the records.[7] The prosecution filed a motion for
reconsideration but was denied in the other assailed Order dated
October 19, 1999.[8]
This prompted respondent Susan Ramirez, the complaining
witness in Criminal Case No. 19933-MN, to file with the Court of
Appeals a petition for certiorari[9] with application for preliminary
injunction and temporary restraining order.[10]
On May 31, 2000, the Appellate Court rendered a Decision nullifying
and setting aside the assailed Orders issued by the trial court.
Hence, this petition for review on certiorari.
The issue for our resolution is whether Esperanza Alvarez
can testify against her husband in Criminal Case No. 19933-MN.
Section 22, Rule 130 of the Revised Rules of Court provides:
Sec. 22. Disqualification by reason of
marriage. During their marriage, neither the
husband nor the wife may testify for or against
the other without the consent of the affected
spouse, except in a civil case by one against the
other, or in a criminal case for a crime committed
by one against the other or the latters direct
descendants or ascendants.
The reasons given for the rule are:
1. There is identity of interests between husband and
wife;
2. If one were to testify for or against the other, there is
consequent danger of perjury;
3. The policy of the law is to guard the security and
confidences of private life, even at the risk of an
occasional failure of justice, and to prevent domestic
disunion and unhappiness; and
4. Where there is want of domestic tranquility there is
danger of punishing one spouse through the hostile
testimony of the other.[11]
But like all other general rules, the marital disqualification
rule has its own exceptions, both in civil actions between the spouses
and in criminal cases for offenses committed by one against the other.
Like the rule itself, the exceptions are backed by sound reasons which,
in the excepted cases, outweigh those in support of the general rule.
Page |2
For instance, where the marital and domestic relations are so strained
that there is no more harmony to be preserved nor peace and
tranquility which may be disturbed, the reason based upon such
harmony and tranquility fails. In such a case, identity of interests
disappears and the consequent danger of perjury based on that
identity is non-existent. Likewise, in such a situation, the security and
confidences of private life, which the law aims at protecting, will be
nothing but ideals, which through their absence, merely leave a void
in the unhappy home.[12]
In Ordoo vs. Daquigan,[13] this Court held:
We think that the correct rule, which
may be adopted in this jurisdiction, is that laid
down in Cargil vs. State, 35 ALR 133, 220 Pac. 64,
25 Okl. 314, wherein the court said:
The rule that the
injury must amount to a
physical wrong upon the
person is too narrow; and the
rule that any offense
remotely or indirectly
affecting domestic harmony
comes within the exception is
too broad. The better rule is
that, when an offense directly
attacks, or directly and vitally
impairs, the conjugal relation,
it comes within the
exception to the statute that
one shall not be a witness
against the other except in a
criminal prosecution for a
crime committee (by) one
against the other.
Obviously, the offense of arson attributed to petitioner,
directly impairs the conjugal relation between him and his wife
Esperanza. His act, as embodied in the Information for arson filed
against him, eradicates all the major aspects of marital life such as
trust, confidence, respect and love by which virtues the conjugal
relationship survives and flourishes.
As correctly observed by the Court of Appeals:
The act of private respondent in setting
fire to the house of his sister-in-law Susan
Ramirez, knowing fully well that his wife was
there, and in fact with the alleged intent of
injuring the latter, is an act totally alien to the
harmony and confidences of marital relation
which the disqualification primarily seeks to
protect. The criminal act complained of had the
effect of directly and vitally impairing the conjugal
relation. It underscored the fact that the marital
and domestic relations between her and the
 Page |3

accused-husband have become so strained that

there is no more harmony, peace or tranquility to
be preserved. The Supreme Court has held that in
such a case, identity is non-existent. In such a
situation, the security and confidences of private
life which the law aims to protect are nothing but
ideals which through their absence, merely leave
a void in the unhappy home. (People v. Castaeda,
271 SCRA 504). Thus, there is no longer any
reason to apply the Marital Disqualification Rule.

It should be stressed that as shown by the records, prior to

the commission of the offense, the relationship between petitioner
and his wife was already strained. In fact, they were separated de
facto almost six months before the incident. Indeed, the evidence and
facts presented reveal that the preservation of the marriage between
petitioner and Esperanza is no longer an interest the State aims to
protect.

At this point, it bears emphasis that the State, being

interested in laying the truth before the courts so that the guilty may
be punished and the innocent exonerated, must have the right to
offer the direct testimony of Esperanza, even against the objection of
the accused, because (as stated by this Court in Francisco[14]), it was
the latter himself who gave rise to its necessity.

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED. The

trial court, RTC, Branch 72, Malabon City, is ordered to allow
Esperanza Alvarez to testify against petitioner, her husband, in
Criminal Case No. 19933-MN. Costs against petitioner.

SO ORDERED.
 Page |4

G.R. No. 143340. August 15, 2001.* action not having been brought against but by the estate or
representatives of the deceased.

Same; Same; Words and Phrases; “Assignor” of a party means

LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners, vs. “assignor of a cause of action which has arisen, and not the assignor
LAMBERTO T. CHUA, respondent. of a right assigned before any cause of action has arisen.”—The
testimony of Josephine is not covered by the “Dead Man’s Statute”
Partnership; Contracts; A partnership may be constituted in any form,
for the simple reason that she is not “a party or assignor of a party to
except where immovable property or real rights are contributed
a case or persons in whose behalf a case is prosecuted.” Records show
thereto, in which case a public instrument shall be necessary.—A
that respondent offered the testimony of Josephine to establish the
partnership may be constituted in any form, except where immovable
existence of the partnership between respondent and Jacinto.
property or real rights are contributed thereto, in which case a public
Petitioners’ insistence that Josephine is the alter ego of respondent
instrument shall be necessary. Hence, based on the intention of the
does not make her an assignor because the term “assignor” of a party
parties, as gathered from the facts and ascertained from their
means “assignor of a cause of action which has arisen, and not the
language and conduct, a verbal contract of partnership may arise. The
assignor of a right assigned before any cause of action has arisen.”
essential points that must be proven to show that a partnership was
Plainly then, Josephine is merely a witness of respondent, the latter
agreed upon are (1) mutual contribution to a common stock, and (2)
being the party plaintiff.
a joint interest in the profits. Understandably so, in view of the
absence of a written contract of partnership between respondent and
Jacinto, respondent resorted to the introduction of documentary and
testimonial evidence to prove said partnership. The crucial issue to Same; Dissolution; The Civil Code expressly provides that upon
settle then is whether or not the “Dead Man’s Statute” applies to this dissolution, the partnership continues and its legal personality is
case so as to render inadmissible respondent’s testimony and that of retained until the complete winding up of its business culminating in
his witness, Josephine. its termination.—With regard to petitioners’ insistence that laches
and/or prescription should have extinguished respondent’s claim, we
agree with the trial court and the Court of Appeals that the action for
accounting filed by respondent three (3) years after Jacinto’s death
Same; Evidence; Dead Man’s Statute; Requirements; The “Dead
was well within the prescribed period. The Civil Code provides that an
Man’s Statute” provides that if one party to the alleged transaction is
action to enforce an oral contract prescribes in six (6) years while the
precluded from testifying by death, insanity, or other mental
right to demand an accounting for a partner’s interest as against the
disabilities, the surviving party is not entitled to undue advantage of
person continuing the business accrues at the date of dissolution, in
giving his own uncontradicted and unexplained account of the
the absence of any contrary agreement. Considering that the death
transaction.—The “Dead Man’s Statute” provides that if one party to
of a partner results in the dissolution of the partnership, in this case,
the alleged transaction is precluded from testifying by death, insanity,
it was after Jacinto’s death that respondent as the surviving partner
or other mental disabilities, the surviving party is not entitled to the
had the right to an account of his interest as against petitioners. It
undue advantage of giving his own uncontradicted and unexplained
bears stressing that while Jacinto’s death dissolved the partnership,
account of the transaction. But before this rule can be successfully
the dissolution did not immediately terminate the partnership. The
invoked to bar the introduction of testimonial evidence, it is
Civil Code expressly provides that upon dissolution, the partnership
necessary that: “1. The witness is a party or assignor of a party to a
continues and its legal personality is retained until the complete
case or persons in whose behalf a case is prosecuted. 2. The action is
winding up of its business, culminating in its termination. Sunga-Chan
against an executor or administrator or other representative of a
vs. Chua, 363 SCRA 249, G.R. No. 143340 August 15, 2001
deceased person or a person of unsound mind; 3. The subject-matter
of the action is a claim or demand against the estate of such deceased
person or against person of unsound mind; 4. His testimony refers to Before us is a petition for review on certiorari under Rule 45 of the
any matter of fact which occurred before the death of such deceased Rules of Court of the Decision1 of the Court of Appeals dated January
person or before such person became of unsound mind.” 31, 2000 in the case entitled "Lamberto T. Chua vs. Lilibeth Sunga
Chan and Cecilia Sunga" and of the Resolution dated May 23, 2000
denying the motion for reconsideration of herein petitioners Lilibeth
Sunga and Cecilia Sunga (hereafter collectively referred to as
Same; Same; Same; Same; When it is the executor or administrator or petitioners).
representatives of the estate that sets up the counterclaim, the
plaintiff, herein respondent, may testify to occurrences before the
death of the deceased to defeat the counterclaim.—Two reasons The pertinent facts of this case are as follows:
forestall the application of the “Dead Man’s Statute” to this case.
First, petitioners filed a compulsory counterclaim against respondent On June 22, 1992, Lamberto T. Chua (hereafter respondent) filed a
in their answer before the trial court, and with the filing of their complaint against Lilibeth Sunga Chan (hereafter petitioner Lilibeth)
counterclaim, petitioners themselves effectively removed this case and Cecilia Sunga (hereafter petitioner Cecilia), daughter and wife,
from the ambit of the “Dead Man’s Statute.” Well entrenched is the respectively of the deceased Jacinto L. Sunga (hereafter Jacinto), for
rule that when it is the executor or administrator or representatives "Winding Up of Partnership Affairs, Accounting, Appraisal and
of the estate that sets up the counterclaim, the plaintiff, herein Recovery of Shares and Damages with Writ of Preliminary
respondent, may testify to occurrences before the death of the Attachment" with the Regional Trial Court, Branch 11, Sindangan,
deceased to defeat the counterclaim. Moreover, as defendant in the Zamboanga del Norte.
counterclaim, respondent is not disqualified from testifying as to
matters of fact occurring before the death of the deceased, said

Respondent alleged that in 1977, he verbally entered into a
partnership with Jacinto in the distribution of Shellane Liquefied
Petroleum Gas (LPG) in Manila. For business convenience, respondent
and Jacinto allegedly agreed to register the business name of their
partnership, SHELLITE GAS APPLIANCE CENTER (hereafter Shellite),
under the name of Jacinto as a sole proprietorship. Respondent
allegedly delivered his initial capital contribution of P100,000.00 to
Jacinto while the latter in turn produced P100,000.00 as his
counterpart contribution, with the intention that the profits would be
equally divided between them. The partnership allegedly had Jacinto
as manager, assisted by Josephine Sy (hereafter Josephine), a sister
of the wife respondent, Erlinda Sy. As compensation, Jacinto would
receive a manager's fee or remuneration of 10% of the gross profit
and Josephine would receive 10% of the net profits, in addition to her
wages and other remuneration from the business.
Allegedly, from the time that Shellite opened for business on July 8,
1977, its business operation went quite and was profitable.
Respondent claimed that he could attest to success of their business
because of the volume of orders and deliveries of filled Shellane
cylinder tanks supplied by Pilipinas Shell Petroleum Corporation.
While Jacinto furnished respondent with the merchandise
inventories, balance sheets and net worth of Shellite from 1977 to
1989, respondent however suspected that the amount indicated in
these documents were understated and undervalued by Jacinto and
Josephine for their own selfish reasons and for tax avoidance.
Upon Jacinto's death in the later part of 1989, his surviving wife,
petitioner Cecilia and particularly his daughter, petitioner Lilibeth,
took over the operations, control, custody, disposition and
management of Shellite without respondent's consent. Despite
respondent's repeated demands upon petitioners for accounting,
inventory, appraisal, winding up and restitution of his net shares in
the partnership, petitioners failed to comply. Petitioner Lilibeth
allegedly continued the operations of Shellite, converting to her own
use and advantage its properties.
On March 31, 1991, respondent claimed that after petitioner Lilibeth
ran out the alibis and reasons to evade respondent's demands, she
disbursed out of the partnership funds the amount of P200,000.00
and partially paid the same to respondent. Petitioner Lilibeth
allegedly informed respondent that the P200,000.00 represented
partial payment of the latter's share in the partnership, with a
promise that the former would make the complete inventory and
winding up of the properties of the business establishment. Despite
such commitment, petitioners allegedly failed to comply with their
duty to account, and continued to benefit from the assets and income
of Shellite to the damage and prejudice of respondent.
On December 19, 1992, petitioners filed a Motion to Dismiss on the
ground that the Securities and Exchange Commission (SEC) in Manila,
not the Regional Trial Court in Zamboanga del Norte had jurisdiction
over the action. Respondent opposed the motion to dismiss.
On January 12, 1993, the trial court finding the complaint sufficient in
from and substance denied the motion to dismiss.
On January 30, 1993, petitioners filed their Answer with Compulsory
Counter-claims, contending that they are not liable for partnership
shares, unreceived income/profits, interests, damages and attorney's
fees, that respondent does not have a cause of action against them,
Page |5
and that the trial court has no jurisdiction over the nature of the
action, the SEC being the agency that has original and exclusive
jurisdiction over the case. As counterclaim, petitioner sought
attorney's fees and expenses of litigation.
On August 2, 1993, petitioner filed a second Motion to Dismiss this
time on the ground that the claim for winding up of partnership
affairs, accounting and recovery of shares in partnership affairs,
accounting and recovery of shares in partnership assets/properties
should be dismissed and prosecuted against the estate of deceased
Jacinto in a probate or intestate proceeding.
On August 16, 1993, the trial denied the second motion to dismiss for
lack of merit.
On November 26, 1993, petitioners filed their Petition for Certiorari,
Prohibition and Mandamus with the Court of Appeals docketed as CA-
G.R. SP No. 32499 questioning the denial of the motion to dismiss.
On November 29, 1993, petitioners filed with the trial court a Motion
to Suspend Pre-trial Conference.
On December 13, 1993, the trial court granted the motion to suspend
pre-trial conference.
On November 15, 1994, the Court of Appeals denied the petition for
lack of merit.
On January 16, 1995, this Court denied the petition for review on
certiorari filed by petitioner, "as petitioners failed to show that a
reversible error was committed by the appellate court."2
On February 20, 1995, entry of judgment was made by the Clerk of
Court and the case was remanded to the trial court on April 26, 1995.
On September 25, 1995, the trial court terminated the pre-trial
conference and set the hearing of the case of January 17, 1996.
Respondent presented his evidence while petitioners were
considered to have waived their right to present evidence for their
failure to attend the scheduled date for reception of evidence despite
notice.
On October 7, 1997, the trial court rendered its Decision ruling for
respondent. The dispositive of the Decision reads:
"WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants, as follows:
(1) DIRECTING them to render an accounting in
acceptable form under accounting procedures
and standards of the properties, assets, income
and profits of the Shellite Gas Appliance Center
Since the time of death of Jacinto L. Sunga, from
whom they continued the business operations
including all businesses derived from Shellite Gas
Appliance Center, submit an inventory, and
appraisal of all these properties, assets, income,
profits etc. to the Court and to plaintiff for
approval or disapproval;

(2) ORDERING them to return and restitute to the
partnership any and all properties, assets, income
and profits they misapplied and converted to
their own use and advantage the legally pertain
to the plaintiff and account for the properties
mentioned in pars. A and B on pages 4-5 of this
petition as basis;
(3) DIRECTING them to restitute and pay to the
plaintiff ½ shares and interest of the plaintiff in
the partnership of the listed properties, assets
and good will (sic) in schedules A, B and C, on
pages 4-5 of the petition;
(4) ORDERING them to pay the plaintiff earned
but unreceived income and profits from the
partnership from 1988 to May 30, 1992, when the
plaintiff learned of the closure of the store the
sum of P35,000.00 per month, with legal rate of
interest until fully paid;
(5) ORDERING them to wind up the affairs of the
partnership and terminate its business activities
pursuant to law, after delivering to the plaintiff all
the ½ interest, shares, participation and equity in
the partnership, or the value thereof in money or
money's worth, if the properties are not
physically divisible;
(6) FINDING them especially Lilibeth Sunga-Chan
guilty of breach of trust and in bad faith and hold
them liable to the plaintiff the sum of P50,000.00
as moral and exemplary damages; and,
(7) DIRECTING them to reimburse and pay the
sum of P25,000.00 as attorney's (sic) and
P25,000.00 as litigation expenses.
NO special pronouncements as to COSTS.
SO ORDERED."3
On October 28, 1997, petitioners filed a Notice of Appeal with the trial
court, appealing the case to the Court of Appeals.
On January 31, 2000, the Court of Appeals dismissed the appeal. The
dispositive portion of the Decision reads:
"WHEREFORE, the instant appeal is dismissed. The
appealed decision is AFFIRMED in all respects."4
On May 23, 2000, the Court of Appeals denied the motion for
reconsideration filed by petitioner.
Hence, this petition wherein petitioner relies upon following grounds:
"1. The Court of Appeals erred in making a legal conclusion
that there existed a partnership between respondent
Lamberto T. Chua and the late Jacinto L. Sunga upon the
Page |6
latter'' invitation and offer and that upon his death the
partnership assets and business were taken over by
petitioners.
2. The Court of Appeals erred in making the legal conclusion
that laches and/or prescription did not apply in the instant
case.
3. The Court of Appeals erred in making the legal conclusion
that there was competent and credible evidence to warrant
the finding of a partnership, and assuming arguendo that
indeed there was a partnership, the finding of highly
exaggerated amounts or values in the partnership assets
and profits."5
Petitioners question the correctness of the finding of the trial court
and the Court of Appeals that a partnership existed between
respondent and Jacinto from 1977 until Jacinto's death. In the
absence of any written document to show such partnership between
respondent and Jacinto, petitioners argues that these courts were
proscribes from hearing the testimonies of respondent and his
witness, Josephine, to prove the alleged partnership three years after
Jacinto's death. To support this argument, petitioners invoke the
"Dead Man's Statute' or "Survivorship Rule" under Section 23, Rule
130 of the Rules of Court that provides:
"SEC. 23. Disqualification by reason of death or insanity of
adverse party. – Parties or assignors of parties to a case, or
persons in whose behalf a case is prosecuted, against an
executor or administrator or other representative of a
deceased person, or against a person of unsound mind,
upon a claim or demand against the estate of such
deceased person, or against such person of unsound mind,
cannot testify as to any matter of fact occurring before the
death of such deceased person or before such person
became of unsound mind."
Petitioners thus implore this Court to rule that the testimonies of
respondent and his alter ego, Josephine, should not have been
admitted to prove certain claims against a deceased person (Jacinto),
now represented by petitioners.
We are not persuaded.
A partnership may be constituted in any form, except where
immovable property of real rights are contributed thereto, in which
case a public instrument shall necessary.6 Hence, based on the
intention of the parties, as gathered from the facts and ascertained
from their language and conduct, a verbal contract of partnership
may arise.7 The essential profits that must be proven to that a
partnership was agreed upon are (1) mutual contribution to a
common stock, and (2) a joint interest in the profits.8 Understandably
so, in view of the absence of the written contract of partnership
between respondent and Jacinto, respondent resorted to the
introduction of documentary and testimonial evidence to prove said
partnership. The crucial issue to settle then is to whether or not the
"Dead Man's Statute" applies to this case so as to render inadmissible
respondent's testimony and that of his witness, Josephine.

The "Dead Man's Statute" provides that if one party to the alleged
transaction is precluded from testifying by death, insanity, or other
mental disabilities, the surviving party is not entitled to the undue
advantage of giving his own uncontradicted and unexplained account
of the transaction.9 But before this rule can be successfully invoked to
bar the introduction of testimonial evidence, it is necessary that:
"1. The witness is a party or assignor of a party to case or
persons in whose behalf a case in prosecuted.
2. The action is against an executor or administrator or
other representative of a deceased person or a person of
unsound mind;
3. The subject-matter of the action is a claim or demand
against the estate of such deceased person or against
person of unsound mind;
4. His testimony refers to any matter of fact of which
occurred before the death of such deceased person or
before such person became of unsound mind."10
Two reasons forestall the application of the "Dead Man's Statute" to
this case.
First, petitioners filed a compulsory counterclaim11 against
respondents in their answer before the trial court, and with the filing
of their counterclaim, petitioners themselves effectively removed this
case from the ambit of the "Dead Man's Statute".12 Well entrenched
is the rule that when it is the executor or administrator or
representatives of the estates that sets up the counterclaim, the
plaintiff, herein respondent, may testify to occurrences before the
death of the deceased to defeat the counterclaim.13 Moreover, as
defendant in the counterclaim, respondent is not disqualified from
testifying as to matters of facts occurring before the death of the
deceased, said action not having been brought against but by the
estate or representatives of the deceased.14
Second, the testimony of Josephine is not covered by the "Dead Man's
Statute" for the simple reason that she is not "a party or assignor of a
party to a case or persons in whose behalf a case is prosecuted."
Records show that respondent offered the testimony of Josephine to
establish the existence of the partnership between respondent and
Jacinto. Petitioners' insistence that Josephine is the alter ego of
respondent does not make her an assignor because the term
"assignor" of a party means "assignor of a cause of action which has
arisen, and not the assignor of a right assigned before any cause of
action has arisen."15 Plainly then, Josephine is merely a witness of
respondent, the latter being the party plaintiff.
We are not convinced by petitioners' allegation that Josephine's
testimony lacks probative value because she was allegedly coerced
coerced by respondent, her brother-in-law, to testify in his favor,
Josephine merely declared in court that she was requested by
respondent to testify and that if she were not requested to do so she
would not have testified. We fail to see how we can conclude from
this candid admission that Josephine's testimony is involuntary when
she did not in any way categorically say that she was forced to be a
witness of respondent.
Page |7
Also, the fact that Josephine is the sister of the wife of respondent
does not diminish the value of her testimony since relationship per se,
without more, does not affect the credibility of witnesses.16
Petitioners' reliance alone on the "Dead Man's Statute" to defeat
respondent's claim cannot prevail over the factual findings of the trial
court and the Court of Appeals that a partnership was established
between respondent and Jacinto. Based not only on the testimonial
evidence, but the documentary evidence as well, the trial court and
the Court of Appeals considered the evidence for respondent as
sufficient to prove the formation of partnership, albeit an informal
one.
Notably, petitioners did not present any evidence in their favor during
trial. By the weight of judicial precedents, a factual matter like the
finding of the existence of a partnership between respondent and
Jacinto cannot be inquired into by this Court on review.17 This Court
can no longer be tasked to go over the proofs presented by the parties
and analyze, assess and weigh them to ascertain if the trial court and
the appellate court were correct in according superior credit to this
or that piece of evidence of one party or the other.18 It must be also
pointed out that petitioners failed to attend the presentation of
evidence of respondent. Petitioners cannot now turn to this Court to
question the admissibility and authenticity of the documentary
evidence of respondent when petitioners failed to object to the
admissibility of the evidence at the time that such evidence was
offered.19
With regard to petitioners' insistence that laches and/or prescription
should have extinguished respondent's claim, we agree with the trial
court and the Court of Appeals that the action for accounting filed by
respondents three (3) years after Jacinto's death was well within the
prescribed period. The Civil Code provides that an action to enforce
an oral contract prescribes in six (6) years20 while the right to demand
an accounting for a partner's interest as against the person continuing
the business accrues at the date of dissolution, in the absence of any
contrary agreement.21 Considering that the death of a partner results
in the dissolution of the partnership22 , in this case, it was Jacinto's
death that respondent as the surviving partner had the right to an
account of his interest as against petitioners. It bears stressing that
while Jacinto's death dissolved the partnership, the dissolution did
not immediately terminate the partnership. The Civil Code23 expressly
provides that upon dissolution, the partnership continues and its legal
personality is retained until the complete winding up of its business,
culminating in its termination.24
In a desperate bid to cast doubt on the validity of the oral partnership
between respondent and Jacinto, petitioners maintain that said
partnership that had initial capital of P200,000.00 should have been
registered with the Securities and Exchange Commission (SEC) since
registration is mandated by the Civil Code, True, Article 1772 of the
Civil Code requires that partnerships with a capital of P3,000.00 or
more must register with the SEC, however, this registration
requirement is not mandatory. Article 1768 of the Civil
Code25 explicitly provides that the partnership retains its juridical
personality even if it fails to register. The failure to register the
contract of partnership does not invalidate the same as among the
partners, so long as the contract has the essential requisites, because
the main purpose of registration is to give notice to third parties, and
it can be assumed that the members themselves knew of the contents
of their contract.26 In the case at bar, non-compliance with this
 Page |8

directory provision of the law will not invalidate the partnership

considering that the totality of the evidence proves that respondent
and Jacinto indeed forged the partnership in question.

WHEREFORE, in view of the foregoing, the petition is DENIED and the

appealed decision is AFFIRMED.

SO ORDERED.

G.R. No. 179786. July 24, 2013.*
JOSIELENE LARA CHAN, petitioner, vs. JOHNNY T. CHAN,
respondent.
Remedial Law; Evidence; Physician-Patient Privileged Communication
Rule; The physician-patient privileged communication rule essentially
means that a physician who gets information while professionally
attending a patient cannot in a civil case be examined without the
patient’s consent as to any facts which would blacken the latter’s
reputation.―The physician-patient privileged communication rule
essentially means that a physician who gets information while
professionally attending a patient cannot in a civil case be examined
without the patient’s consent as to any facts which would blacken the
latter’s reputation. This rule is intended to encourage the patient to
open up to the physician, relate to him the history of his ailment, and
give him access to his body, enabling the physician to make a correct
diagnosis of that ailment and provide the appropriate cure. Any fear
that a physician could be compelled in the future to come to court
and narrate all that had transpired between him and the patient
might prompt the latter to clam up, thus putting his own health at
great risk.
Same; Same; Objection to Evidence; Section 36, Rule 132, states that
objections to evidence must be made after the offer of such evidence
for admission in court.―The case presents a procedural issue, given
that the time to object to the admission of evidence, such as the
hospital records, would be at the time they are offered. The offer
could be made part of the physician’s testimony or as independent
evidence that he had made entries in those records that concern the
patient’s health problems. Section 36, Rule 132, states that objections
to evidence must be made after the offer of such evidence for
admission in court. Thus: SEC. 36. Objection.—Objection to evidence
offered orally must be made immediately after the offer is made.
Objection to a question propounded in the course of the oral
examination of a witness shall be made as soon as the grounds
therefor shall become reasonably apparent. An offer of evidence in
writing shall be objected to within three (3) days after notice of the
offer unless a different period is allowed by the court. In any case, the
grounds for the objections must be specified. Since the offer of
evidence is made at the trial, Josielene’s request for subpoena duces
tecum is premature. She will have to wait for trial to begin before
making a request for the issuance of a subpoena duces tecum
covering Johnny’s hospital records. It is when those records are
produced for examination at the trial, that Johnny may opt to object,
not just to their admission in evidence, but more so to their
disclosure. Section 24(c), Rule 130 of the Rules of Evidence quoted
above is about non-disclosure of privileged matters.
Same; Same; Physician-Patient Privileged Communication Rule; To
allow the disclosure during discovery procedure of the hospital
records ― the results of tests that the physician ordered, the
diagnosis of the patient’s illness, and the advice or treatment he gave
him ― would be to allow access to evidence that is inadmissible
without the patient’s consent.―The right to compel the production
of documents has a limitation: the documents to be disclosed are “not
privileged.” Josielene of course claims that the hospital records
subject of this case are not privileged since it is the “testimonial”
evidence of the physician that may be regarded as privileged. Section
24(c) of Rule 130 states that the physician “cannot in a civil case,
without the consent of the patient, be examined” regarding their
Page |9
professional conversation. The privilege, says Josielene, does not
cover the hospital records, but only the examination of the physician
at the trial. To allow, however, the disclosure during discovery
procedure of the hospital records — the results of tests that the
physician ordered, the diagnosis of the patient’s illness, and the
advice or treatment he gave him — would be to allow access to
evidence that is inadmissible without the patient’s consent. Physician
memorializes all these information in the patient’s records. Disclosing
them would be the equivalent of compelling the physician to testify
on privileged matters he gained while dealing with the patient,
without the latter’s prior consent. Chan vs. Chan, 702 SCRA 76, G.R.
No. 179786 July 24, 2013
DECISION
ABAD, J.:
This case is about the propriety of issuing a subpoena duces tecum for
the production and submission in court of the respondent husband's
hospital record in a case for declaration of nullity of marriage where
one of the issues is his mental fitness as a husband.
The Facts and the Case
On February 6, 2006 petitioner Josielene Lara Chan (Josielene) filed
before the Regional Trial Court (RTC) of Makati City, Branch 144 a
petition for the declaration of nullity of her marriage to respondent
Johnny Chan (Johnny), the dissolution of their conjugal partnership of
gains, and the award of custody of their children to her. Josielene
claimed that Johnny failed to care for and support his family and that
a psychiatrist diagnosed him as mentally deficient due to incessant
drinking and excessive use of prohibited drugs. Indeed, she had
convinced him to undergo hospital confinement for detoxification
and rehabilitation.
Johnny resisted the action, claiming that it was Josielene who failed
in her wifely duties. To save their marriage, he agreed to marriage
counseling but when he and Josielene got to the hospital, two men
forcibly held him by both arms while another gave him an injection.
The marriage relations got worse when the police temporarily
detained Josielene for an unrelated crime and released her only after
the case against her ended. By then, their marriage relationship could
no longer be repaired.
During the pre-trial conference, Josielene pre-marked the Philhealth
Claim Form1 that Johnny attached to his answer as proof that he was
forcibly confined at the rehabilitation unit of a hospital. The form
carried a physician’s handwritten note that Johnny suffered from
"methamphetamine and alcohol abuse." Following up on this point,
on August 22, 2006 Josielene filed with the RTC a request for the
issuance of a subpoena duces tecum addressed to Medical City,
covering Johnny’s medical records when he was there confined. The
request was accompanied by a motion to "be allowed to submit in
evidence" the records sought by subpoena duces tecum. 2
Johnny opposed the motion, arguing that the medical records were
covered by physician-patient privilege. On September 13, 2006 the
RTC sustained the opposition and denied Josielene’s motion. It also
denied her motion for reconsideration, prompting her to file a special
civil action of certiorari before the Court of Appeals (CA) in CA-G.R. SP
97913, imputing grave abuse of discretion to the RTC.

On September 17, 2007 the CA3 denied Josielene’s petition. It ruled
that, if courts were to allow the production of medical records, then
patients would be left with no assurance that whatever relevant
disclosures they may have made to their physicians would be kept
confidential. The prohibition covers not only testimonies, but also
affidavits, certificates, and pertinent hospital records. The CA added
that, although Johnny can waive the privilege, he did not do so in this
case. He attached the Philhealth form to his answer for the limited
purpose of showing his alleged forcible confinement.
Question Presented
The central question presented in this case is:
Whether or not the CA erred in ruling that the trial court correctly
denied the issuance of a subpoena duces tecum covering Johnny’s
hospital records on the ground that these are covered by the
privileged character of the physician-patient communication.
The Ruling of the Court
Josielene requested the issuance of a subpoena duces tecum covering
the hospital records of Johnny’s confinement, which records she
wanted to present in court as evidence in support of her action to
have their marriage declared a nullity. Respondent Johnny resisted
her request for subpoena, however, invoking the privileged character
of those records. He cites Section 24(c), Rule 130 of the Rules of
Evidence which reads:
SEC. 24. Disqualification by reason of privileged communication.—
The following persons cannot testify as to matters learned in
confidence in the following cases:
xxxx
(c) A person authorized to practice medicine, surgery or obstetrics
cannot in a civil case, without the consent of the patient, be examined
as to any advice or treatment given by him or any information which
he may have acquired in attending such patient in a professional
capacity, which information was necessary to enable him to act in that
capacity, and which would blacken the reputation of the patient.
The physician-patient privileged communication rule essentially
means that a physician who gets information while professionally
attending a patient cannot in a civil case be examined without the
patient’s consent as to any facts which would blacken the latter’s
reputation. This rule is intended to encourage the patient to open up
to the physician, relate to him the history of his ailment, and give him
access to his body, enabling the physician to make a correct diagnosis
of that ailment and provide the appropriate cure. Any fear that a
physician could be compelled in the future to come to court and
narrate all that had transpired between him and the patient might
prompt the latter to clam up, thus putting his own health at great
risk.4
1. The case presents a procedural issue, given that the time to object
to the admission of evidence, such as the hospital records, would be
at the time they are offered. The offer could be made part of the
physician’s testimony or as independent evidence that he had made
entries in those records that concern the patient’s health problems.
P a g e | 10
Section 36, Rule 132, states that objections to evidence must be made
after the offer of such evidence for admission in court. Thus:
SEC. 36. Objection.— Objection to evidence offered orally must be
made immediately after the offer is made.
Objection to a question propounded in the course of the oral
examination of a witness shall be made as soon as the grounds
therefor shall become reasonably apparent.
An offer of evidence in writing shall be objected to within three (3)
days after notice of the offer unless a different period is allowed by
the court.
In any case, the grounds for the objections must be specified.
Since the offer of evidence is made at the trial, Josielene’s request for
subpoena duces tecum is premature. She will have to wait for trial to
begin before making a request for the issuance of a subpoena duces
tecum covering Johnny’s hospital records. It is when those records are
produced for examination at the trial, that Johnny may opt to object,
not just to their admission in evidence, but more so to their
disclosure. Section 24(c), Rule 130 of the Rules of Evidence quoted
above is about non-disclosure of privileged matters.
2. It is of course possible to treat Josielene’s motion for the issuance
of a subpoena duces tecum covering the hospital records as a motion
for production of documents, a discovery procedure available to a
litigant prior to trial. Section 1, Rule 27 of the Rules of Civil Procedure
provides:
SEC. 1. Motion for production or inspection; order.— Upon motion of
any party showing good cause therefor, the court in which an action
is pending may (a) order any party to produce and permit the
inspection and copying or photographing, by or on behalf of the
moving party, of any designated documents, papers, books, accounts,
letters, photographs, objects or tangible things, not privileged, which
constitute or contain evidence material to any matter involved in the
action and which are in his possession, custody or control; or (b) order
any party to permit entry upon designated land or other property in
his possession or control for the purpose of inspecting, measuring,
surveying, or photographing the property or any designated relevant
object or operation thereon. The order shall specify the time, place
and manner of making the inspection and taking copies and
photographs, and may prescribe such terms and conditions as are
just. (Emphasis supplied)
But the above right to compel the production of documents has a
limitation: the documents to be disclosed are "not privileged."
Josielene of course claims that the hospital records subject of this
case are not privileged since it is the "testimonial" evidence of the
physician that may be regarded as privileged. Section 24(c) of Rule
130 states that the physician "cannot in a civil case, without the
consent of the patient, be examined" regarding their professional
conversation. The privilege, says Josielene, does not cover the
hospital records, but only the examination of the physician at the trial.
To allow, however, the disclosure during discovery procedure of the
hospital records—the results of tests that the physician ordered, the
 P a g e | 11

diagnosis of the patient’s illness, and the advice or treatment he gave

him—would be to allow access to evidence that is inadmissible
without the

patient’s consent. Physician memorializes all these information in the

patient’s records. Disclosing them would be the equivalent of
compelling the physician to testify on privileged matters he gained
while dealing with the patient, without the latter’s prior consent.

3. Josielene argues that since Johnny admitted in his answer to the

petition before the RTC that he had been confined in a hospital
against his will and in fact attached to his answer a Philhealth claim
form covering that confinement, he should be deemed to have
waived the privileged character of its records. Josielene invokes
Section 17, Rule 132 of the Rules of Evidence that provides:

SEC. 17. When part of transaction, writing or record given in evidence,

the remainder admissible.— When part of an act, declaration,
conversation, writing or record is given in evidence by one party, the
whole of the same subject may be inquired into by the other, and
when a detached act, declaration, conversation, writing or record is
given in evidence, any other act, declaration, conversation, writing or
record necessary to its understanding may also be given in
evidence.1âwphi1

But, trial in the case had not yet begun. Consequently, it cannot be
said that Johnny had already presented the Philhealth claim form in
evidence, the act contemplated above which would justify Josielene
into requesting an inquiry into the details of his hospital confinement.
Johnny was not yet bound to adduce evidence in the case when he
filed his answer. Any request for disclosure of his hospital records
would again be premature.

For all of the above reasons, the CA and the RTC were justified in
denying Josielene her request for the production in court of Johnny’s
hospital records.

ACCORDINGLY, the Court DENIES the petition and AFFIRMS the

Decision of the Court of Appeals in CA-G.R. SP 97913 dated
September 17, 2007.

SO ORDERED.