[GRN 22948 March 17, 1925] THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff and appellee, vs.

FAUSTO V. CARLOS, defendant and appellant. 1. CRIMINAL PROCEDURE; EVIDENCE; HUSBAND AND WIFE; PRIVILEGED COMMUNICATION.-Where a privileged communication from one spouse to the other comes into the hands of a third party, without collusion or voluntary disclosure on the part of either of the spouses, the privilege is thereby extinguished and the communication, if otherwise competent, becomes admissible in evidence. 2. ID.; ID.; DOCUMENTS OBTAINED BY ILLEGAL SEARCHES.-The rule laid down by the United States Supreme Court in the cases of Boyd and Boyd vs. United States (116 U. S., 616) and Silverthorne Lumber Co. and Silverthorne vs. United States (251 U. S., 385) in regard to evidence obtained by illegal searches, discussed. 3. ID.; ID.; LETTERS BETWEEN HUSBAND AND WIFE.-A latter Written by a wife to her husband is incompetent as evidence in a ,criminal case against the latter where there is no indication of assent on his part to the statements contained in the letter. The letter may, however, be admissible to impeach the testimony of the wife if she goes upon the witness-stand in the trial of the case. APPEAL from a judgment of the Court of First Instance of Manila. Diaz, J. The facts are stated in the opinion of the court. M. H. de Joya, Jose Padilla, Vicente Sotto and Monico Mercado for appellant. Attorney-General Villa-Real and City Fiscal Guevara for appellee. OSTRAND, J.: This is an appeal from a decision of the Court of First Instance of the City of Manila finding the defendant Fausto V. Carlos guilty of the crime of murder and sentencing him to suffer life imprisonment, with the accessory penalties prescribed by law and with the costs. It appears from the evidence that the victim of the alleged murder, Dr. Pablo G. Sityar, on March 3, 1924, in Mary Chiles Hospital, performed a surgical operation upon the defendant's wife for appendicitis and certain other ailments. She remained in the hospital until the 18th of the same month, but after her release therefrom she was required to go several times to the clinic of Doctor Sityar at No. 40 Escolta, for the purpose of dressing the wounds caused by the operation. On these occasions she was accompanied by her husband, the defendant. The defendant states that on one of the visits, that of March 20, 1924, Doctor Sityar sent him out on an errand to buy some medicine, and that while the defendant was absent on this errand Doctor Sityar outraged the wife. The defendant further states that his wife informed him of the outrage shortly after leaving the clinic. Notwithstanding this it nevertheless appears that he again went there on March 28th to consult the deceased about some lung trouble from which he, the defendant, was suffering. He was given .some medical treatment and appears to have made at least matter over with the deceased; that this statement was made in such an insolent and contemptuous manner that the defendant became greatly incensed and remembering the outrage committed upon his wife, he assumed a threatening attitude and challenged the deceased to go downstairs with him and there settle the matter; that the deceased thereupon took a pocket-knife from the center drawer of his desk and attacked the defendant, endeavoring to force him out of the office; that the defendant, making use of his knowledge of fencing, succeeded in taking the knife away from the deceased and blinded by fury stabbed him first in the right side of the breast and then in the epigastric region, and fearing that the deceased might secure some other weapon or receive assistance from the people in the adjoining room, he again stabbed him, this time in the back. The defendant's testimony as to the struggle described is in conflict with the evidence presented by the prosecution. But assuming that it is true, it is very evident that it fails to establish a case of self-defense and that, in reality, the only question here to be determined is whether the defendant is guilty of murder or of simple homicide. The court below found that the crime was committed with premeditation and therefore constituted murder. This finding can only be sustained by taking into consideration Exhibit L, a letter written to the defendant by his wife and siezed by the police in searching his effects on the day of his arrest. It is dated May 25, 1924, two days before the commission of the crime and shows that the writer feared that the defendant contemplated resorting to physical violence in dealing with the deceased. Counsel for the defendant argues vigorously that the letter was a privileged communication and therefore not admissible in evidence. The numerical weight of authority is, however, to the effect that where a privileged communication from one spouse to another comes into the hands of a third party, whether legally or not, without matter over with the deceased; that this statement was made in such an insolent and contemptuous manner that the defendant became greatly incensed and remembering the outrage committed upon his wife, he assumed a threatening attitude and challenged the deceased to go downstairs with him and there settle the matter; that the deceased thereupon took a pocket-knife from the center drawer of his desk and attacked the defendant, endeavoring to force him out of the office; that the defendant, making use of his knowledge of fencing, succeeded in taking the knife away from the deceased and blinded by fury stabbed him first in the right side of the breast and then in the epigastric region, and fearing that the deceased might secure some other weapon or receive assistance from the people in the adjoining room, he again stabbed him, this time in the back. The defendant's testimony as to the struggle described is in conflict with the evidence presented by the prosecution. But assuming that it is true, it is very evident that it fails to establish a case of self-defense and

that, in reality, the only question here to be determined is whether the defendant is guilty of murder or of simple homicide. The court below found that the crime was committed with premeditation and therefore constituted murder. This finding can only be sustained by taking into consideration Exhibit L, a letter written to the defendant by his wife and siezed by the police in searching his effects on the day of his arrest. It is dated May 25, 1924, two days before the commission of the crime and shows that the writer feared that the defendant contemplated resorting to physical violence in dealing with the deceased. Counsel for the defendant argues vigorously that the letter was a privileged communication and therefore not admissible in evidence. The numerical weight of authority is, however, to the effect that where a privileged communication from one spouse to another comes into the hands of a third party, whether legally or not, without collusion and voluntary disclosure on the part of either of the spouses, the privilege is thereby extinguished and the communication, if otherwise competent, becomes admissible. (28 R. C. L., 530 and authorities there cited.) Such is the view of the majority of this court. Professor Wigmore states the rule as follows: "For documents of communication coming into the possession of a third person, a distinction should obtain, analogous to that already indicated for a client's communications (ante, par. 2325, 2326) ; i.e., if they were obtained from the addressee by voluntary delivery, they should still be privileged (for otherwise the privilege could by collusion be practically nullified for written communications) ; but if they were obtained surreptitiously or otherwise without the addressee's consent, the privilege should cease." (5 Wigmore on Evidence, 2d ed., par. 2339.) The letter in question was obtained through a search for which no warrant appears to have been issued and counsel for the defendant cites the causes of Boyd and Boyd vs. United States (116 U. S., 616) and Silverthorne Lumber Co. and Silverthorne vs. United States (251 U. S., 385) as authority for the proposition that documents obtained by illegal searches of the defendant's effects are not admissible in evidence in a criminal case. In discussing this point we can do no better than to quote Professor Wigmore: "The foregoing doctrine (i. e., that the admissibility of evidence is not affected by the illegality of the means through which the party has been enabled to obtain the evidence) was never doubted until the appearance of the ill-starred majority opinion of Boyd vs. United States, in 1885, which has exercised unhealthy influence upon subsequent judicial opinion in many States. "The progress of this doctrine of Boyd vs. United States was as follows: (a) The Boyd Case remained unquestioned in its own Court for twenty years; meantime receiving frequent disfavor in the State Courts (ante, par. 2183). (b) Then in Adams vs. New York, in 1904, it was virtually repudiated in the Federal Supreme Court, and the orthodox precedents recorded in the State courts (ante,par.2183) were expressly approved. (c) Next, after another twenty years, in 1914-moved this time, not by erroneous history, but by misplaced sentimentality-the Federal Supreme Court, in Weeks vs. United States, reverted to the original doctrine of the Boyd Case, but with a condition, viz., that the illegality of the search and seizure should first have been directly litigated and established by a motion, made before trial, for the return of the things seized; so that, after such a motion, and then only, the illegality would be noticed in the main trial and the evidence thus obtained would be excluded. (4 Wigmore on Evidence, 2d ed., par. 2184.) In the Silverthorne Lumber Co. case the United States Supreme Court adhered to its decision in the Weeks Case. The doctrine laid down in these cases has been followed by some of the State courts but has been severely criticized and does not appear to have been generally accepted. But assuming, without deciding, that it prevails in this jurisdiction it is, nevertheless, under the decisions in the Weeks and Silverthorne cases, inapplicable to the present case. Here the illegality of the search and seizure was not "directly litigated and established by a motion, made before trial, for the return of the things seized." The letter Exhibit L must, however, be excluded for reasons not discussed in the briefs. The letter was written by the wife of the defendant and if she had testified at the trial the letter might have been admissible to impeach her testimony, but she was not put on the witness-stand and the letter was therefore not offered for that purpose. If the defendant either by answer or otherwise had indicated his assent to the statements contained in the letter it might also have been admissible, but such is not the case here; the fact that he had the letter in his possession is no indication of acquiescence or assent on his part. The letter is therefore nothing but pure hearsay and its admission in evidence violates the constitutional right of the defendant in a criminal case to be confronted with the witnesses for the prosecution and have the opportunity to cross-examine them. In this respect there can be no difference between an ordinary communication and one originally privileged. The question is radically different from that of the admissibility of testimony of a third party as to a conversation between a husband and wife overheard by the witness. Testimony of that character is admissible on the ground that it relates to a conversation in which both spouses took part and on the further ground that where the defendant has the opportunity to answer a statement made to him by his spouse and fails to do so, his silence implies assent. That cannot apply where the statement is contained in an unanswered letter. The Attorney-General in support of the contrary view quotes Wigmore, as follows: "* * * Express communication is always a proper mode of evidencing knowledge or belief. Communication to a husband or wife is always receivable to show probable knowledge by the other (except where they are living apart or are not in good terms), because, while it is not certain that the one will tell the other, and while the probability is less upon some subjects than upon others, still there is always some probability, which is all that

can be fairly asked for admissibility. (1 Wigmore, id., par. 261.) This may possibly be good law, though Wigmore cites no authority in support of his assertion, but as far as we can see it has little or nothing to do with the present case. As we have already intimated, if Exhibit L is excluded, there is in our opinion not sufficient evidence in the record to show that the crime was premeditated. The prosecution maintains that the crime was committed with alevosia. This contention is based principally on the fact that one of the wounds received by the deceased showed a downward direction indicating that the deceased was sitting down when the wound was inflicted. We do not think this fact is sufficient proof. The direction of the wound would depend largely upon the manner in which the knife was held. For the reasons stated we find the defendant guilty of simple homicide, without aggravating or extenuating circumstances. The sentence appealed from is therefore modified by reducing the penalty to fourteen years, eight months and one day of reclusion temporal, with the corresponding accessory penalties and with the costs against the appellant. So ordered. Johnson, Malcolm, Johns, and Romualdez, JJ., concur. VILLAMOR, J., dissenting: His Honor, the judge who tried this case, inserts in his decision the testimony of the witness Lucio Javillonar as follows: "The witness, Lucio Javillonar, testified that he went to the office of the deceased some minutes before six o'clock in that evening in order to take him, as had previously been agreed upon between them, so that they might retire together to Pasig, Rizal, where they resided then; that having noticed that the deceased was busy in his office, talking with a man about accounts, instead of entering, he stayed at the waiting room, walking from one end to another, while waiting for that man to go out; that in view of the pitch of the voice in which the conversation was held between the deceased and his visitor, and what he had heard, though little as it was, of said conversation, he believes that there was not, nor could there have been, any change of hard words, dispute or discussion of any kind; that shortly thereafter, he saw the screen of the door of the deceased's office suddenly open, and the deceased rush out stained with blood, and followed closely by the accused who then brandished a steel arm in the right hand; that upon seeing the deceased and overtaking him, leaning upon one of the screens of the door of a tailor shop a few feet from his office, slightly inclined to the right, with the arms lowered and about to fall to the floor, the accused stabbed him on the right side of the chest, thereby inflicting a wound on the right nipple; and that then the accused descended the staircase to escape away, at the same time that the deceased was falling to the ground and was being taken by him with the assistance of other persons from said place to a lancape (a sofa) where he died a few minutes later, unable to say a word." In deciding the question as to whether the act committed is murder, with the qualifying circumstance of treachery, as claimed by the Attorney-General, the trial judge says that the principal ground of the prosecution for holding that the commission of the crime was attended by the qualifying circumstance of treachery is a mere inference from the testimony of Lucio Javillonar, and that the nature of the wounds found on the epigastric region of the deceased and his back do not mean anything, because they could have been inflicted while the deceased was standing, seated or inclined. A careful consideration of the testimony of Lucio Javillonar, as set out in the judgment appealed from, will show that, according to said eyewitness, the deceased was with his arms lowered and about to fall to the floor when the accused stabbed him on the right side of the chest with the weapon he was carrying, thereby inflicting a wound on the right nipple, and that, according to the doctor who examined the wounds, anyone of them could have caused the death of the deceased. These being the facts proven, I am of opinion that application must be made here of the doctrine laid down by this court in the case of United States vs. Baluyot (40 Phil., 385), wherein it was held that "Even though a deadly attack may be begun under conditions not exhibiting the feature of alevosia, yet if the assault is continued and the crime consummated with alevosia, such circumstance may be taken into consideration as a qualifying factor in the offense of murder." I admit that none of the witnesses who testified in this case has seen the beginning of the aggression; but it positively appears from the testimony of the said witness Lucio Javillonar that, notwithstanding that the deceased was already wounded and about to fall to the floor, he struck him with another mortal blow with he weapon he was carrying, which shows that the accused consuummated the crime with treachery. For the foregoing, I am of opinion that the judgment appealed from must be affirmed, considering the act committed as murder, with the qualifying circumstance of treachery, and in this sense I dissent from the majority opinion. Judgment modified, penalty reduced.

[GRN L-568 July 16, 1947] THE PEOPLE OF THE PHILIPPINES, plaintiff and appellee, vs. JUAN FRANCISCO defendant and appellant. 1. CRIMINAL LAW; PARRICIDE; MOTIVE, WHEN UNNECESSARY.-It is not necessary to prove motive in case the commission of the crime is established as required by law.

2. ID.; ID.; EVIDENCE; HUSBAND AND WIFE; INCOMPETENCY TO TESTIFY FOR OR AGAINST EACH OTHER; REASONS FOR.-"The reasons given by law text-writers and courts why neither a husband nor wife shall in any case be a witness against the other except in a criminal prosecution for a crime committed by one against the other have been stated thus: First, identity of interests; second, the consequent danger of perjury; third, the policy of the law which deems it necessary to guard the security and confidences of private life even at the risk of an occasional failure of justice, and which rejects such evidence because its admission would lead to domestic disunion and unhappines; and, fourth, because, where a want of domestic tranquility exists, there is danger of punishing one spouse through the hostile testimony of the other." (70 C. J., 119.) 3. ID.; ID.; ID.; ID.; ID.; EXCEPTIONS; REASONS FOR.-The rule that the husband and wife cannot testify for or against each other, as all other general rules, 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. 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. 4. ID.; ID.; IV.; ID.; ID.; WAIVER; CASE AT BAR.-The defendant, who was accused of killing his son, testifying in his own behalf, not only limited himself to denying that he was the killer, but went further and added what was really a new matter consisting in the imputation of the crime upon his wife. Held: That in giving such testimony, the husband must, in all fairness, be held to have intended all its natural and necessary consequences. By his said act, the husband-himself exercising the very right which he would deny to his wife upon the ground of their marital relations-must be taken to have waived all objection to the latter's testimony upon rebuttal, even considering that such objection would have been available at the outset. 5. ID.; ID.; IV.; ID.; ID.; WAIVER, CASES OF, ENUMERATED BY COURTS AND TEXT-WRITERS NOT EXCLUSIVE.-For obvious reasons neither text-writers nor the courts have attempted to make an enumeration of all possible cases of waiver. In the very nature of things, it would be impossible to make a priori such a complete enumeration and to say that it is exclusive. So long as the Legislature itself does not make its own statutory and exclusive specification of cases of such waiver, no complete and exclusive enumeration can, nor should, be attempted by the courts, for in the absence of such legislation the cases of waiver will be as indefinite in number as indefinite are and always will be the varying and unpredictable circumstances surrounding each particular case. 6. ID.; ID.; ID.; REBUTTAL EVIDENCE SECURED TO BOTH STATE AND ACCUSED.-The right to present rebuttal evidence is secured to the State, no less than to the accused, by Rule 115, section 3, paragraph (c), the provision further authorizing the court, in furtherance of justice, to permit one or the other party to offer "new additional evidence bearing upon the main issue in question." 7. ID.; ID.; MITIGATING CIRCUMSTANCES; ILLNESS DIMINISHING WILLPOWER; CASE AT BAR.-Whether the accused be considered simpleton or an eccentric, or the case one of those well-nigh inexplicable phenomena in human conduct where the judge finds himself at a loss to discover an edequate motivation for the proven acts of the accused,-indulging all reasonable intendments in favor of appellant, it was held that when he committed the crime charged against him he must have been suffering from some illness (of the body, the mind, the nerves, or the moral faculty) as is contemplated in paragraph 9 of article 13 of the Revised Penal Code as a mitigating circumstance, namely, "such illness of the offender as would diminish the exercise of the will-power of the offender without however depriving him of consciousness of his acts." APPEAL from a judgment of the Court of First Instance of Mindoro. Daza, J. The facts are stated in the opinion of the court. Augusto Kalaw for appellant. Assistant Solicitor General Roberto A. Gianzon and Acting Solicitor Isidro C. Borromeo for appellee. HILADO, J.: Convicted of the crime of parricide by the Court of First Instance of Mindoro, Juan Francisco appeals to this Court and asks us to reverse the decision of the trial court and to acquit him of the crime charged. On March 4, 1945, defendant, who had been previously arrested on charges of robbery, was being held as a detention prisoner in the municipal jail of Mansalay, Mindoro. On that date he requested permission from the chief of police of Mansalay to go home to see his wife about the procurement of a bail for his provisional release. The permission was granted by the chief of police, and he was allowed to go with sergeant Pacifico Pimentel, who was detailed to guard him. Upon their reaching the house, the sergeant allowed the prisoner to see his wife who was at the time in a room of said house, while said sergeant remained at the foot of the stairs. After a few moments, Pimentel heard the scream of a woman. Running upstairs, he met defendant's wife running out of the room and holding her right breast which was bleeding. Still moments later, Pimentel saw defendant lying down with his little son Romeo, aged one year and a half, on his breast. Pimentel also found defendant to have a wound in his belly while his child had a wound in the back. Pimentel found the child dead. The prosecution, in recommending the imposition of the capital penalty upon the accused, relies mainly on: (1) the affidavit, Exhibit C (translation, Exhibit C-1), which is a virtual confession of the accused; (2) Exhibit D, which

is the record made by the justice of the peace of Mansalay of the arraignment of the defendant upon which the latter entered a plea of guilty; and (3) the rebuttal testimony of Emilia Taladtad, wife of the appellant. Exhibit C is an affidavit signed and sworn to by appellant before the justice of the peace of Mansalay on March 5, 1945. Exhibit C-1 is its English translation. In said affidavit appellant declares that: "I asked permission from the chief of police so that I may be able to raise my bond and to indicate to me the house of one Guillermo Gervasio, a policeman, and I was consented and the sergeant of police accompanied me to my house; that upon arriving at the house, Sgt. Pacifico Pimentel allowed me to go up in order that I may be able to talk to my wife and the sergeant of police awaited me in the stairs of the house; when 1 was in the house, I remembered what my uncle told me to the effect that he would order someone to kill me because I am a shame and a dishonor to our family and suddenly I lost my senses and I thought to myself that if someone would kill me it would be more preferable for me to kill myself ; when I looked at the bed I saw a scissor near my wife and unconsciously I picked up the said scissor and immediately stabbed my wife whereupon I looked for my child on the bed and stabbed him; I killed my son Romeo Francisco whose age is more or less two years and after that I stabbed myself; after stabbing myself, I heard a shot and the sergeant of police asked me if I would surrender to him or not; I replied him 'yes' then I lost my consciousness." Sergeant of police Pimentel, whose veracity we find in the evidence no reason to doubt, declared (p. 6, t. s. n., Lunar) that the accused confessed to him that because he was already tired or disgusted with his life "on account of the accusation of his father-in-law" against him, he wanted to wipe out his family by stabbing his wife, his son and himself, and killing the three of them. The same witness also stated (p. 9, ibid.) that the accused confessed to him that he stabbed his wife, his child and himself because he was ashamed, as his father-in-law told him that he should rather die than live in shame for having dishonored the family of his wife. The voluntariness and spontaneity of the confession contained in Exhibit C was testified to by the justice of the peace of Mansalay and police sergeant Pimentel. The first stated in substance that the accused signed and swore to said affidavit in his presence as well as that of Pimentel, one Sebastian Punzalan, and the chief of police Alfredo Iwahi; that said justice of the peace had previously read the contents of the same affidavit to the accused and that the accused signed without any intimidation having been exerted in the presence of said justice of the peace; that the accused signed voluntarily in the session hall of the justice of the peace court in barrio Paclasan (pp. 26-27, ibid.). Pimentel testified, upon the same point, that no force was exerted upon appellant to state what is contained in the affidavit; that he had not maltreated or boxed the accused as pretended by the latter; that the contents of the exhibit were read to the accused; that he did not threaten the accused to shoot the latter if he would not swear to Exhibit C before the justice of the peace, as declared by said accused (pp. 25-26, ibid.). In this connection we note from the testimony of the accused himself that on the way to the house of the justice of the peace after the incident, lie was being helped by chief of police Iwahi when, according to him, sergeant Pimentel told him that he was going to swear to the contents of Exhibit C and that if he would not do so Pimentel would shoot him (p. 17, ibid.) ; that (the same accused assured the court) Iwahi treated him well (t. s. n., p. 20, ibid.) ; and really from the entire testimony of this accused the good treatment accorded him by chief of police lwahi is clearly discernible. He was under preventive detention in the house of lwahi and it was lwahi who suggested or told him, after he had killed and dressed the former's pig, that he bring a kilo of the meat to his (appellant's) wife (p. 13, ibid.). It was also Iwahi who allowed him to go to his house on the same occasion for the purposes of the procurement of his bail (p. 13, ibid.). Under these circumstances, besides the complete absence of proof of any reason or motive why Pimentel should so threaten the accused, we find the accused's version incredible. On page 16 of the same transcript, answering a question by the Court of First Instance, the accused testified that he understands English and the translation Exhibit C-1 of the affidavit Exhibit C is in that language. Other indications of appellant's lack of trustworthiness are: While on page 14 of said transcript he testified that he was the only one who went to the house of his wife because Pimentel, according to him, remained in the house of Roberto Magramo, on page 13 he declared that he was accompanied by the sergeant of police of Mansalay, Pacifico Pimentel to the house of his wife and that the chief of police ordered Pimentel to so accompany him. Contradicting the same pretension of his having gone alone to his wife's house is his own testimony on page 17 of the transcript wherein he assured affirmatively the question of his own counsel whether Pimentel was the policeman who was with him to guard him on the occasion of his going to his wife's house; and really, while he imputed upon his wife the wounding of their child, who died as a consequence thereof, he admitted that he did not tell this to the justice of the peace of Mansalay (p. 18, ibid.), and the reason he assigned for this passive conduct on his part to the effect that he was afraid of Pimentel (p. 19, ibid.) is patently unacceptable, for no motive whatsoever has been established to make us believe that the accused had reasons to be so afraid of Pimentel. Appellant's testimony to the effect that Pacifico Pimentel was testifying against him because Pimentel "being my guard that time he might be held responsible for allowing me to go alone" (p. 17, ibid.), is absolutely without merit. This testimony clearly reveals a desire to show that because Pimentel allowed the accused to go up the house while the former stayed at the foot of the stairs, said Pimentel would be responsible for what had happened unless the accused was the one who killed the child and wounded his wife rather than the wife having accidentally wounded the child and killed him and been stabbed by the accused, who also stabbed himself. As we said a moment ago, we do not give any merit to this testimony. The reason is obvious. If it was Pimentel's purpose in testifying against the accused to relieve himself of all responsibility for what had happened, it would have been more conducive to this result if Pimentel had testified that it -was not the accused, whom he had allowed to go upstairs unguarded, who was guilty, but his wife, of the wounding of

the child, and that the accused wounded his wife only as the result of the obfuscation produced by the child's death. And the fact that Pimentel gave the version which might place no small blame on him for allowing the accused to go up the house alone, gives special weight to his testimony. This case, as developed by the evidence for the prosecution, which has not been destroyed nor enervated by that of the defense, presents a truly strange happening. But the fact of the commission of the crime of parricide appears to us to have been established beyond reasonable doubt. As to the reasons impelling the commission of the act, the case is a strange one and admittedly not common. But while it is not necessary even to prove motive in case the commission of the crime is established as required by law (U. S. vs. Ricafor, 1 Phil., 173; U. S. vs. McMann, 4 Phil., 561; U. S. vs. Reyes, 18 Phil., 495; U. S. vs. Balmori and Apostol, 18 Phil., 578), here we have a case of a crime proven beyond reasonable doubt, not absolutely without a proven motive, but with proof of a motive testified to by the accused himself in his confession, strange though it be. But at times "truth is stranger than fiction," and it so happens here. The law must be applied to the facts. We have scanned and searched the evidence and the record diligently for facts and circumstances which might sufficiently establish insanity or any allied defense, but we have failed to find them. As we construe the evidence, we believe that Exhibit C contains the truth, as narrated by the accused himself who, at the time of making it, must have been moved only by the determination of a repentant father and husband to acknowledge his guilt for acts which, though perhaps done under circumstances productive of a diminution of the exercise of will-power, fell short of depriving the offender of consciousness of his acts. We will have occasion to further consider this aspect of the case later. Exhibit C was signed and sworn to by appellant the day following the fatal event. Presumably, on making this confession appellant had not yet had time to reflect upon the consequences of such a confession to himselfegoism was not yet allowed to operate against the promptings of his conscience. But when on February 23, 1946 almost one year after-this man testified in his own defense in the Court of First Instance, he already had had ample opportunity to reflect upon those consequences. And what happened? As in similar cases, he repudiated his confession, and alleged torture and violence to have been exerted upon his person and his mind in order, so he now pretends, to extract it from him. As we find the confession to have been given voluntarily, we feel justified in concluding that its subsequent repudiation by the accused almost a year after must have been due to his fear of its consequences to himself, which he not improbably thought might cost him his own life. It was the struggle between the noble and the ignoble in the man, and the latter, aided by the instinct of selfpreservation, won. Defense counsel attacks the value of Exhibit C as evidence of guilt for the reason that the statements contained therein were not, counsel contends, given spontaneously but through use of violence and intimidation. He also questions the admissibility of Exhibit D on the ground that it has not been properly identified; and, with more vigor and stronger emphasis, he impugns the admissibility of the testimony of appellant's wife, invoking the provision of section 26 (d) of Rule 123 prohibiting the wife and the husband from testifying for or against each other. As to Exhibit C, this document was sworn to and subscribed by said accused before the justice of the peace of Mansalay. This official testified that he asked the prisoner before the latter signed said exhibit whether he understood the contents thereof, and that said latter answered in the affirmative. The witness further declared that appellant signed the exhibit voluntarily and that said appellant said that the said affidavit was his (p. 10, ibid.). There is a total absence of evidence, besides the testimony of appellant himself, to show that his statements contained in said exhibit were extracted from him by the use of violence and intimidation. While we are not unaware of the practice resorted to by some peace officers of extracting admissions or confessions from persons accused of crime by the employment of third-degree methods, in the present case we fail to find from the evidence sufficient proof to destroy the categorical testimony of the justice of the peace that Exhibit C was signed by appellant voluntarily and with a full understanding thereof. Furthermore, the statements of appellant in said Exhibit C were corroborated by the testimony of his wife on rebuttal. This leads us to the consideration of the admissibility of the wife's testimony. The rule contained in section 26 (d) of Rule 123 is an old one. Courts and text-writers on the subject have assigned as reasons therefor the following: First, identity of interest; second, the consequent danger of perjury; third, the policy of the law which deems it necessary to guard the security and confidences of private life even at the risk of an occasional failure of justice, and which rejects such evidence because its admission would lead to domestic disunion and unhappiness; and, fourth, because where a want of domestic tranquility exists, there is danger of punishing one spouse through the hostile testimony of the other. This has been said in the case of Cargill vs. State (220 Pac., 64, 65; 25 Okl. Cr., 314; 35 A. L. R., 133), thus: "The reasons given by law text-writers and courts why neither a husband nor wife shall in any case be a witness against the other except in a criminal prosecution for a crime committed by one against the other have been stated thus: First, identity of interests; second, the consequent danger of perjury; third, the policy of the law which deems it necessary to guard the security and confidences of private life even at the risk of an occasional failure of justice, and which rejects such evidence because its admission would lead to domestic disunion and unhappiness; and, fourth, because, where a want of domestic tranquility exists, there is danger of punishing one spouse through the hostile testimony of the other. (70 C. J., 119.)" However, as all other general rules, this one 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. 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. At any rate, in the instant case the wife did not testify in the direct evidence for the prosecution but under circumstances presently to be stated. It will be noted that the wife only testified against her husband after the latter, testifying in his own defense, imputed upon her the killing of their little son. (P. 15, ibid.) By all rules of justice and reason this gave the prosecution, which had theretofore refrained from presenting the wife as a witness against her husband, the right to do so, as it did in rebuttal; and to the wife herself the right to so testify, at least, in self-defense, not, of course, against being subjected to punishment in that case in which she was not a defendant but against any or all of various possible consequences which might flow from her silence, namely- (1) a criminal prosecution against her which might be instituted by the corresponding authorities upon the basis of her husband's aforesaid testimony; (2) in the moral and social sense, her being believed by those who heard the testimony orally given, as well as by those who may read the same, once put in writing, to be the killer of her infant child. It has been aptly said that the law of evidence is the law of common sense. Presuming the husband who so testified against his wife to be endowed with common sense, he must be taken to have expected that the most natural reaction which the said testimony would give rise to on the part of the prosecution, as well as of his wife, was to deny upon rebuttal the new matter which was involved in the same testimony, namely, the imputation that it was his wife who killed their little son. Upon the part of the prosecution, because he not only limited himself to denying that he was the killer, but went further and added what was really a new matter consisting in the imputation of the crime upon his wife. And upon the part of the wife, because of the reasons already set forth above. Hence, in giving such testimony, the husband must, in all fairness, be held to have intended all its aforesaid natural and necessary consequences. By his said act, the husband -himself exercising the very right which he would deny to his wife upon the ground of their marital relationsmust be taken to have waived all objection to the latter's testimony upon rebuttal, even considering that such objection would have been available at the outset. At this point, it behooves us to emphasize the all-important role of the State in this case. 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 rebutting testimony in question, even against the objection of the accused, because it was the latter himself who gave rise to its necessity. It may be said that the accused husband thought that he would have more chances of convincing the court of his pretended innocence if he pointed to his wife as having caused the death of their child, instead of simply denying that he was the author of the fatal act. To this we would counter by saying that if he was to be allowed, for his convenience, to make his choice and thereby impute the act upon his spouse, justice would be partial and one-sided if both the State and the wife were to be absolutely precluded from introducing the latter's rebutting testimony. As well settled as this rule of marital incompetency itself is the other that it may be waived. "Waiver of incompetency.-Objections to the competency of a husband or wife to testify in a criminal prosecution against the other may be waived as in the case of the other witnesses generally. Thus, the accused waives his or her privilege by calling the other spouse as a witness for him or her, thereby making the spouse subject to cross-examination in the usual manner. It is well established that where an accused introduces his wife as a witness in his behalf, the state is entitled to question her as to all matters germane and pertinent to her testimony on direct examination. It is also true that objection to the spouse's competency must be made when he or she is first offered as a witness, and that the incompetency may be waived by the failure of the accused to make timely objection to the admission of the spouse's testimony, although knowing of such incompetency, and the testimony admitted, especially if the accused has assented to the admission, either expressly or impliedly. Other courts have held that the witness's testimony is not admissible even with the other spouse's consent. Clearly, if the statute provides that a spouse shall in no case testify against the other except in a prosecution for an offense against the other, the failure of the accused to object does not enable the state to use the spouse as a witness." (3 Wharton's Criminal Evidence, 11th Ed., section 1205, pp, 2060-2061.) Wharton, in note 10 at the foot of page 2060 of the cited volume refers us to section 1149 appearing on page 1988 of the same volume, dealing with waiver of objection to incompetency of witnesses in general. We transcribe this section for convenient reference: "Waiver of objection to incompetency.-A party may waive his objections to the competency of a witness and permit him to testify. A party calling an incompetent witness as his own waives.the incompetency. Also, if, after such incompetency appears, there is failure to make timely objection, by a party having knowledge of the incompetency, the objection will be deemed waived, whether it is on the ground of want of mental capacity or for some other reason. If the objection could have been taken during the trial, a new trial will be refused and the objection will not be available on writ of error. If, however, the objection of a party is overruled and the ruling has been excepted to, the party may thereafter examine the witness upon the matters as to which he was allowed to testify to without waiving his objections to the witness's competency." (Ibid., section 1149, p. 1988.) It will be noted, as was to be expected, that in the last above-quoted section, the author mentions certain specific cases where the courts concerned hold that there was waiver, but for obvious reasons neither the

author nor the said courts have attempted to make an enumeration of all possible cases of waiver. In the very nature of things, it would be impossible to make a priori such a complete enumeration and to say that it is exclusive. So long as the Legislature itself does not make its own statutory and exclusive specification of cases of such waiver-and we doubt that it ever will-no complete and exclusive enumeration can, nor should, be attempted by the courts, for in the absence of such legislation the cases of waiver will be as indefinite in number as indefinite are and always will be the varying and unpredictable circumstances surrounding each particular case. To illustrate, Mr. Wharton says above that the accused waives his or her privilege by calling the other spouse as a witness for him or her, thereby making the spouse subject to cross-examination in the usual manner, the reason being that the State is entitled to question the spouse so presented as to all matters germane and pertinent to the direct testimony. In the same way, and for a similar reason, when the herein appellant gave his testimony in question in his defense, the State had the right to rebut the new matter contained in that testimony consisting in the imputation upon his wife of the death of the little boy. And that rebuttal evidence, which was rendered necessary by appellant's own testimony, could be furnished only by his wife who, as he fully knew, was alone with him and their son at the precise place and time of the event. This right to rebut is secured to the State, no less than to the accused, by Rule 115, section 3, paragraph (c), the provision further authorizing the court, in furtherance of justice, to permit one or the other party to offer "new additional. evidence bearing upon the main issue in question." So that if the waiver that we here declare to flow from the above-mentioned testimony of appellant does not happen to be among those which were mentioned in the cases cited by Mr. Wharton, that is no reason against the existence of said waiver. When the husband testified that it was his wife who caused the death of their son, he could not, let us repeat, justly expect the State to keep silent and refrain from rebutting such new matter in his testimony, through the only witness available, -namely, the wife; nor could he legitimately seal his wife's lips and thus gravely expose her to the danger of criminal proceedings against her being started by the authorities upon the strength and basis of said testimony of her husband, or to bear the moral and social stigma of being thought, believed, or even just suspected, to be the killer of her own off spring. A decent respect and considerate regard for the feelings of an average mother will tell us that such a moral and social stigma would be no less injurious to her than a criminal punishment. And if the wife should, in such a case and at such a juncture, be allowed to testify upon rebuttal, the scope of her testimony should at least be the same as that of her husband. This is only simple justice and fairness dictated by common sense. Since the husband had testified that it was his wife who caused the death of the little boy, she should be allowed to say that it was really her husband who did it. We hold that it is not necessary, to justify such rebuttal evidence, and to declare the existence of the waiver upon which it is based, that the wife be in jeopardy of punishment in the same case by reason of such testimony of her accused husband. The rule of waiver of objection to the competency of witnesses generally does not require this prerequisite in the case between husband and wife. Rather the rule makes the determination of the question hinge around the consequences which by common sense, in justice and in fairness, should be deemed to have been expected by the spouse who first testified naturally to flow from his act of giving that testimony. At any rate, the trial court not only had the power to allow the State to utilize the wife as rebuttal witness, but also the discretion to permit "new additional evidence bearing upon the main issue in question." But even restricting the wife's testimony to merely contradicting her husband's version that she was the one who killed their child, there is evidence beyond reasonable doubt that appellant was the killer. With the testimony of both spouses upon the point, instead of that of the accused husband alone, let justice take its course. As to Exhibit D, this document was a part of the record of the case in the justice of the peace court which was expressly presented by the prosecution as evidence in the Court of First Instance. But after all has been said and done, in justice to the accused, we believe that, whether we are dealing with a simpleton or an eccentric, or we have here one of those well-nigh inexplicable phenomena in human conduct where the judge finds himself at a loss to discover an adequate motivation for the proven acts of the accused,indulging all reasonable intendments in favor of appellant, we are of opinion that when he committed the crime charged against him he must have been suffering from some illness (of the body, the mind, the nerves, or the moral faculty) as is contemplated in paragraph 9 of article 13 of the Revised Penal Code as a mitigating circumstance, namely, "such illness of the offender as would diminish the exercise of the will-power of the offender without however depriving him of consciousness of his acts." Article 246 of the Revised Penal Code punishes parricide by the penalty of reclusion perpetua to death. Article 63, paragraph 3, of the same Code, provides that when the commission of the act is attended by some mitigating circumstance and there is no aggravating circumstance, and the law prescribes a penalty composed of two indivisible penalties, the lesser penalty shall be applied; in this case, in view of the above indicated circumstance and there being no aggravating circumstance, the lesser penalty is reclusion perpetua, which was the penalty correctly applied by the trial court, which penalty, of course, carries with it the accessory penalties provided for in article 41 of the said Code. The accused should also be sentenced to indemnify the heirs of the deceased Romeo Francisco in the sum of P2,000, and to pay the costs. As above modified, the appealed judgment is affirmed, with costs against appellant. So ordered. Moran, C. J., Paras Perfecto, Bengzon, and Tuason, JJ., concur. Briones, J., concurs in the result. PADILLA, J.:

I concur in the result. To my mind the evidence is sufficient to support the judgment of conviction without taking into consideration the testimony of the appellant's wife in rebuttal. I agree with Mr. Justice Feria in his dissent that she is incompetent to testify against the appellant, her husband, there 'being an objection to her testifying against him. PABLO, M., concurrente y disidente: Concurro con la opinion de la mayoria en cuanto condena al acusado. En mi opinion aun sin tener en cuenta la declaracin de la esposa del acusado en contra-pruebas, obra en autos concluyente prueba que establece la culpabilidad del acusado. En cuanto a la interpretacin de la Regla 123, articulo 26, seccin (d), concurro con la disidencia del Magistrado Sr. Feria. La declaracin de la esposa debe ser excluida como prueba contra el acusado, por inadmisible. FERIA J., dissenting: Without necessity of discussing the merits of the case and deciding whether the appellant's conviction by the Court of First Instance must be affirmed or reversed, for the majority has decided to affirm it and it would be useless now for the undersigned to dissent from or concur in the conviction of the appellant, we dissent from the -new theory enunciated in the majority opinion that the appellant's 'testimony to the effect that his wife was the one who unintentionally inflicted the wound which caused the death of the child, capacitated his wife to testify as a witness on rebuttal against her husband, and "constituted a waiver of all objections to her testimony." The pertinent portion of the majority decision reads as follows: "'The reasons given by law text-writers and courts why,neither a husband nor wife shall in any case be a witness against the other except in a criminal prosecution for a crime committed by one against the other have been stated thus: First, Identity of interests; second, the consequent danger of perjury; third, the policy of the law which deems it necessary to guard the security and confidences of private life even at the risk of an occasional failure of justice, and which rejects such evidence because its admission would lead to domestic disunion and unhappiness; and, fourth, because, where a want of domestic tranquility exists, there is danger of punishing one spouse through the hostile testimony of the other. (70 C. J., 119)' "However, as all other general rules, this one 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. 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 nonexistent. 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." The new theory of the majority is evidently untenable, for it is predicated upon the incorrect premise or assumption that the above-mentioned reasons or grounds of the in capacity of one of the spouses to testify against the other in a proceeding in which the latter is a party, are also applicable to testimony of one spouse against the other who is not a party to the cause in which it is offered or given, as in the present case. This premise or assumption is incorrect, for said reasons do not apply to the latter case. Were it applicable, the law would have also disqualified one spouse to give testimony which in any way disparages or disfavor the other although the latter is not a party to the cause; but the law does not so. The prohibition contained in section 26 (d) of Rule 123 only relates to cases in which the testimony of a spouse is offered for or against the other in a proceeding to which the latter is a party (U. S. vs. Concepcion, 31 Phil., 182; People vs. Natividad, 70 Phil., 315). And the reason is obvious. Although the testimony of the husband against his wife who is not a party to the case is admissible; yet, as said testimony can not be used as evidence against the wife in a civil case or criminal prosecution against her, it would not effectively strain the marital and domestic relations; lead to domestic disunion and unhappiness; disturb the peace, harmony, and tranquility of the family, and destroy the identity of interest. Such testimony, far from producing said results, might have a different effect. Where one of the spouses testifies in his defense that the other spouse, who is not a party.to the case, is the one who committed the crime charged, his testimony, if believed by the Court, would result in the acquittal and release of the defendant spouse and enable the accused, if confined in prison, to join again his spouse, without placing the latter in danger of being prosecuted and convicted by his testimony. In the present case, the testimony of the appellant does not require any rebuttal by his wife, because, according to the clear provisions of law, the latter can not testify against her husband appellant, and the courts should take it into consideration in determining the probative force of such a testimony. And it does not call for a denial by the wife in herself or own defense, because it can not be used or admitted without her consent as evidence in a criminal case instituted against her for her son's death. Under the new theory of the majority, the prosecutor of one spouse who, in order to free himself from liability as defendant in a criminal case would testify, as the appellant has testified, that his other spouse who is not a party to the case is responsible for their child's death, may take advantage of such testimony to induce that other spouse to testify in her defense according to the prosecution, and the latter in so testifying would naturally accuse the defendant to be the guilty party in order to save himself or herself from criminal liability. Who may give the assurance that the defendant's wife in the present case did testify the way she testified against her husband, not because her husband is really guilty, but because she wanted to defend and save

herself, taking into consideration the way the question were propounded to her by the prosecution and her answers thereto? The prosecution asked her: "The accused testified here that you were the one who inflicted the wound at the back of Romeo Francisco, is that right?" and she answered: "No sir he was the one who inflicted the wound to my son Romeo Francisco." "P. Did you see him inflict the wound to the child?-R. Yes sir." (P. 23, st. notes.) Who may dispel from the mind the doubt that the prosecution in the court below, believing erroneously, but in good faith, that the testimonv of the qD'VP,11,qnf in his defense is admissible against and tended to make his wife criminally responsible, imparted such wrong belief to and induced her thereby to testify imputing the commission of the crime to her husband although he is not guilty, just to save hereslf? It is plain that if the wife testified against her husband, it was because the fiscal erroneously assumed in his interrogatory above quoted that the appellant later imputed to her the crime charged, for the testimony of the appellant quoted below clearly belies the fiscal's assumption: "P. Please tell the Court what happened when you sat beside your wife? "Sr. Fiscal: Objection, no basis. "Court: He may answer. "R. When I sat beside my wife and our son was lying face downward on the bed I was joking my wife because at that time I was drunk. "P. What was the relative position of your son with respect to you and your wife?-R. 1 am going to demonstrate our relative positions, (the accused was facing his wife and the wife was facing in the opposite direction and the son was between them lying face downward and little bit behind on the bed). I used to touch her, so she swung her hand backward towards me, then I stood up and evaded the blow. Later on I heard the boy cried. "P. What hand did your wife swing, left or right hand? -R. Her right hand. "P. Is this the very scissors when she swung her arm?R. Yes, sir. "P. After she swung her arm what happened?-R. The child cried. "P. Then what happened?-R. When I stood up our child was already wounded so I became obfuscated. "P. Then what happened?-R. I got hold of the scissors that she was holding and stabbed her and then stabbed myself." Besides, it is to be borne in mind that the capacity or incapacity of one of the spouses to testify against the other is governed by the statute in force and the Court should construe the statute such as it is, and not as it should. It is for the law-making power to evolve new theories and enact law in accordance therewith. The provisions of section 26 (c), Rule 123, were copied from those of section 383 (3) of Act No. 190, as amended, and the latter were in turn taken from similar provisions of law in force in the States of the Union, which are based on the common-law. Under the common-law, husband and wife are absolutely incompetent against each other except in a civil case instituted by one against the other,.or in a criminal case for a crime committed by one against the other; and the consent of a spouse can not render the other spouse competent., But in many states, statutes were enacted granting exceptions upon the common-law rule and enabling one of them to testify against the other with the consent of the latter in civil case, or the consent of the other or both in criminal cases. Under such statute, one spouse who calls the other as a witness thereby consents that' the latter shall testify; and if the adverse party offers one of the spouses against the other and the latter does not object, then he or she is presumed to have consented to it. In the case of Toskstein vs. Birmmerle (150 Mo., 491; 131 S. W., 126), it was held that incompetency of a wife continues as at common-law where she is not rendered competent under the provision of the enabling statute. In the case of Conley vs. State (176 Ark., 654; 3 S. W. [2d], 980), the Supreme Court of Arkansas ruled that statutes providing that no person shall be excluded from testifying in prosecution for violation of Liquor Act do not change the general rule that a wife cannot testify against her husband in a criminal prosecution. And in another case entitled Connecticut Fire Ins. Co. vs. Chester P. & Ste. G. R. Co. (171 Mo. App., 70; 153 S. W., 544), it was held that unless wife comes within exceptions of the enabling statute granting exceptions upon the common-law rule excluding her testimony in an action in which her husband is interested, the wife can not testify. Therefore, inasmuch as our statute on the matter, or section 26 (d), Rule 123, provides that a wife cannot be examined for or against her husband without his consent except in a criminal case for crime committed by one against the other, and the appellant in the present case objected strenuously to the testimony of her wife against him, her testimony is inadmissible and can not be taken into consideration in the decision of the case. We can not, by any process of reasoning or stretch of imagination, construe said provision so as to capacitate a wife to be a witness against her husband if the latter, in testifying in his own defense, says that his wife was the one who accidentally inflicted the fatal wound on their small child. We can not evolve a new theory, however reasonable and plausible it may be, and apply for the first time as if it were the law in the present case against the appellant. It may be a good theory or a sufficient reason for amending the law in order to include it as one of the exceptions of the rule incapacitating one spouse to testify against the other; but we can not legally apply it as a law now against the appellant, a defendant in a criminal case. But the majority, not being sure of its stand on the admissibility of the testimony of the wife against her husband, further states: "At any rate, in the instant case the wife did not testify in the direct evidence for the prosecution but under circumstances presently to be stated. It will be noted that the wife only testified against her husband after the latter, testifying in his own defense, imputed upon her the killing of their little son. (P. 15, ibid.) By all rules of justice and reason this gave the prosecution, which had theretofore refrained from presenting the wife as a

witness against her husband, the right to do so, as it did in rebuttal; and to the wife herself the right to so testify, at least, in self-defense, (P. 704, ante.) To this we may reply that, in the first place, the testimony of the wife to the effect that her husband was the one who inflicted and she saw him inflict the wound on Romeo Francisco that caused the death of the latter (pp. 23, 24, st. notes), is not a rebutting but a new additional evidence bearing upon the main issue whether or not the defendant is guilty of the offense charged. For according to section 3 (c), Rule 115, the prosecution may, after the defendant has presented evidence in support of his defense, "offer rebutting testimony, but rebutting only, unless the court, in furtherance of justice, permit them to offer new additional evidence bearing upon the main issue in question." Her testimony would have been in rebuttal only if she had limited herself to say that she did not inflict the wound on her son. And in the second place, to make the testimony of the wife admissible in rebuttal against the appellant, would be to amend the provision of said section 26 (d) of Rule 123 and establish another exception, that has never been adopted by the statutes anywhere in the States of the Union and in this jurisdiction. And not being sure as to the scope of a rebuttal testimony, the majority opinion adds the following: "When the husband testified that it was his wife who caused the death of their son, he could not, let us repeat, justly expect the State to keep silent and refrain from rebutting such new matter in his testimony, through the only witness available, namely, the wife; nor could he legitimately seal his wife's lips and thus gravely expose her to the danger of criminal proceedings against her being started by the authorities upon the strength and basis of said testimony of her husband, or to bear the moral and social stigma of being thought, believed, or even just suspected, to be the killer of her own offspring. * * * And if the wife should, in such a case and at such a juncture, be allowed to testify upon rebuttal, the scope of her testimony should at least be the same as that of her husband. This is only simple justice and fairness dictated by common sense. Since the husband had testified that it was his wife who caused the death of the little boy, she should be allowed to say that it was really her husband who did it. * * * At any rate, the trial court not only had the power to allow the State to utilize the wife as rebuttal witness, but also the discretion to permit 'new additional evidence bearing upon the main issue in question.' But even restricting the wife's testimony to merely contradicting her husband's version that she was the one who killed their child, there is evidence beyond reasonable doubt that appellant was the killer." It is elemental that the scope of a rebuttal is circumscribed to contradicting or destroying the evidence of the adverse party tending to prove new matter in favor of the latter, and can not extend to disproving directly the main issue in question, that is, the guilt of the appellant in the present case. Evidently, the testimony of the husband that his wife was the one who unintentionally inflicted the wound which caused the death of their child, can not 64 gravely expose her to the danger of criminal proceeding against her," and "to bear the moral and social stigma of wing thought, believed, or even just suspected to be the killer of her own offspring;" because said testimony is not admissible against his wife in that or in any other cases, and everybody is presumed to know the law that incapacitates the wife to testify against her accused husband and contradict what the latter may testify against her however false it may be. The conclusion in the majority decision that, if not in rebuttal, the court had discretion to permit the prosecution to present the testimony of the wife, as additional evidence bearing upon the main issue in question, is absolutely untenable, since we have already shown that such a testimony is inadmissible as evidence, and this court has already decided in the case of People vs. Natividad (above cited), squarely applicable to the present case, that "a wife can not testify against her husband in a criminal case in which the latter was charged with having killed the child of the former." The matter under discussion is the incompetency of the wife to testify, directly or in rebuttal, in the present case against her husband, and not the guilt or innocence of the appellant. Hence the last statement in the above quoted decision of the majority that "even restricting the wife's testimony as merely contradicting the husband's version that she was the one who killed their child, there is other evidence beyond reasonable doubt that the appellant is the killer," is out of place for it has no bearing on the issue. The conclusion of fact on which a sentence declaring a defendant guilty must be positive and not argumentative. And if the appellant is to be convicted on the strength of other evidence, aside from the testimony of the appellant's wife, the decision should express clearly and distinctly the facts and the law on which the decision convicting the appellant is based, as required by section 12, Article IX of the Constitution. The majority's conclusion that the testimony of the appellant to the effect that the cause of the death of their child was the wound unintentionally inflicted by his wife, constituted a waiver of all objection to her testimony, is without any foundation in fact and in law; because the defendant had strongly and persistently objected to his wife taking the witness stand (st. nts., p. 23), and no law, court or authority, from time immemorial up to the present, has ever recognized such testimony as a waiver. The only cases in which the incapacity of one of the spouses to testify against the other is considered waived according to law, are those stated in section 1205, of Wharton on Criminal Evidence, Vol. 3, 11th ed., quoted in the very opinion of the majority, which says the following: "SEC. 1205. Waiver of incompetency.-Objections to the competency of a husband or wife to testify in a criminal prosecution against the other may be waived as in the case of other witnesses generally. Thus, the accused waives his or her privilege by calling the other spouse as a witness for him or her, thereby making the spouse subject to cross-examination in the usual manner. It is well established that where an accused introduces his wife as a witness in his behalf, the state is entitled to question her as to all matters germane and pertinent to

her testimony on direct examination. It is also true that objection to the spouse's competency must be made when he or she is first offered as a witness, and that the incompetency may be waived by the failure of the accused to make timely objection to the admission of the spouse's testimony, although knowing of such incompetency, and the testimony admitted, especially if the accused has assented to the admission, either expressly or impliedly." But the decision, after quoting subsequently section 1149 of the same work, which refers to waiver of objection to competency of a witness in general, concludes by saying "It will be noted, as was to be expected, that in the last quoted-section, the author mentions certain specific cases where the courts concerned hold that there was waiver, but for obvious reasons neither the author nor the said courts have attempted to make an enumeration of all possible cases of waiver. In the very nature of things, it would be impossible to make a priori such a complete enumeration and to say that it is exclusive." The last quoted section in the decision reads in its pertinent part as follows: " SEC. 1149. Waiver of objection to incompetency.-A party may waive his objection to the competency of a witness and permit him to testify. A party calling an incompetent witness as his own waives the incompetency. Also, if, after such incompetency appears, there is a failure to make timely objection, by a party having knowledge of the incompetency, the objection will be deemed waived, whether it is on the ground of want of mental capacity or for some other reason. * * *" The cases of waiver specified by Wharton in sections 1149 and 1205 of his work on criminal evidence above quoted, are the only cases of waiver of the objection to the competency of one spouse to testify against the other, as well as of the objection to the competency of any other witness to testify. Not only Wharton but all works on criminal evidence enumerate only those cases, because there are no other cases provided for by the statutes or declared by the courts in their decisions. Authors or writers on evidence do not generally evolve and formulate new legal theories but only expound those based on positive laws as the latter have been interpreted and construed up-to-date by the courts. It is to be presumed that during several centuries in which the rule excluding the testimony of one spouse in a case in which the other is interested has been in force,. a case similar to the present must have arisen, and it would be too presumptuous to assume that this Court is the first to find correctly that the case is one of the exceptions upon said rule. For the majority can not point out a single decision in support of the exception which the majority intends to establish now for the first time. The above mentioned cases of the objection to the competency of one of the spouses to testify against the other are the only ones, and no writers on evidence nor courts did or could enumerate or recognize other cases, since no legislative or law making power had so provided; because what is called waiver is merely or nothing more than the consent of one spouse that the other testify in a case in which he or she is interested or a party, consent provided for as exception by law. As the consent may be either express or implied: express when the spouse who is a party presents the other spouse to testify, and implied when the adverse party or the prosecution presents the other spouse as a witness, and the spouse against whom the other is to testify does not object; so the waiver may also be express and implied. And, therefore, just as there can not be any other way of giving such consent than those above stated, so there is no other case of waiver under the laws now in force. Therefore, this Court must, in the interest of justice, reject the testimony of the defendant's wife, admitted as rebuttal evidence over the objection of the appellant, and considered by the majority as corroborative of the defendant's extrajudicial confession Exhibit C, and decide whether this confession alone is sufficient to support the appellant's conviction. Judgment modified.

[GRN 105938 September 20, 1996] TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN, and EDUARDO U. ESCUETA, petitioners, vs. THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and RAUL S. ROCO, respondents. [GRN 108113 September 20, 1996] PARAJA G. HAYUDINI, petitioner, vs. THE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents. DECISION SECOND DIVISION VITUG, J., separate opinion: DAVIDE, JR, J., Dissenting Opinion: PUNO, J., Dissenting Opinion: APPEARANCES OF COUNSEL Manuel G. Abello for petitioners. Roco Bunag Kapunan & Migallos for Raul S. Roco. Mario E. Ongkiko for Presidential Commission on Good Government. KAPUNAN, J.: These cases touch the very cornerstone of every State's Judicial system, upon which the workings of the contentious and adversarial system in the Philippine legal process are based - the sanctity of fiduciary duty in the client-lawyer relationship. The fiduciary duty of a counsel and advocate is also what makes the law

profession a unique position of trust and confidence, which distinguishes it from any other calling. In this instance, we have no recourse but to uphold and strengthen the mantle of protection accorded to the confidentiality that proceeds from the performance of the lawyer's duty to his client. The facts of the case are undisputed. The matters raised herein are an offshoot of the institution of the Complaint on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines, through the Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-gotten wealth, which includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al." 1 Among the defendants named in the case are herein petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul S. Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as the ACCRA Law Firm). ACCRA Law Firm performed legal services for its clients, which included, among others, the organization and acquisition of business associations and/ or organizations, with the correlative and incidental services where its members acted as incorporators, or simply, as stockholders. More specifically, in the performance of these services, the members of the law firm delivered to its client documents which substantiate the client's equity holdings, i.e., stock certificates endorsed in blank representing the shares registered in the client"s name, and a blank deed of trust or assignment covering said shares. In the course of their dealings with their clients, the members of the law firm acquire information relative to the assets of clients as well as their personal and business circumstances. As members of the ACCRA Law Firm, petitioners and private respondent Raul Roco admit that they assisted in the organization and acquisition of the companies included in Civil Case No. 0033, and in keeping with the office practice, ACCRA lawyers acted as nominees-stockholders of the said corporations involved in sequestration proceedings. 2 On August 20,1991, respondent Presidential Commission on Good government (hereinafter referred to as respondent PCGG) filed a "Motion to Admit Third Amended Complaint" and "Third Amended Complaint" which excluded private respondent Raul S. Roco from the complaint in PCGG Case No. 33 as party-defendant. 3 Respondent PCGG based its exclusion of private respondent Roco as party-defendant on his undertaking that he will reveal the identity of the principal/s for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 33. 4 Petitioners were included in the Third Amended Complaint on the strength of the following allegations: 14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara Concepcion Cruz Regala and Abello law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other in setting up, through the use of the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and more than twenty other coconut levy funded corporations, including the acquisition of San Miguel Corporation shares and its institutionalization through presidential directives of the coconut monopoly. Through insidious means and machinations, ACCRA, being the wholly-owned investment arm, ACCRA Investments Corporation, became the holder or approximately fifteen million shares representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks ACCRA Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has approximately 1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as holding approximately 3,744 shares as of February, 1984. 5 In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers alleged that: 4.4. Defendants-ACCRA lawyers' participation in the acts with which their co-defendants are charged, was in furtherance of legitimate lawyering. 4.4.1. In the course of rendering professional and legal services to clients, defendants-ACCRA lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta, became holders of shares of stock in the corporations listed under their respective names in Annex 'A' of the expanded Amended Complaint as incorporating or acquiring stockholders only and, as such, they do not claim any proprietary interest in the said shares of stock. 4.5. Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976 of Mermaid Marketing Corporation, which was organized for legitimate business purposes not related to the allegations of the expanded Amended Complaint. However, he has long ago transferred any material interest therein and therefore denies that the 'shares' appearing in his name in Annex 'A' of the expanded Amended Complaint are his assets. 6 Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a separate answer denying the allegations in the complaint implicating him in the alleged ill-gotten wealth. 7 Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent PCGG similarly grant the same treatment to them (exclusion as partiesdefendants) as accorded private respondent Roco. 8 The Counter-Motion for dropping petitioners from the complaint was duly set for hearing on October 18, 1991 in accordance with the requirements of Rule 15 of the Rules of Court. In its "Comment," respondent PCGG set the following conditions precedent for the exclusion of petitioners, namely: (a) the disclosure of the identity of its clients; (b) submission of documents substantiating the lawyer-

client relationship; and (c) the submission of the deeds of assignments petitioners executed in favor of its clients covering their respective shareholdings. 9 Consequently, respondent PCGG presented supposed proof to substantiate compliance by private respondent Roco of the conditions precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in behalf of private respondent Roco originally requesting the reinvestigation and/or re-examination of the evidence of the PCGG against Roco in its Complaint in PCGG Case No. 33. 10 It is noteworthy that during said proceedings, private respondent Roco did not refute petitioners' contention that he did actually not reveal the identity of the client involved in PCGG Case No. 33, nor had he undertaken to reveal the identity of the client for whom he acted as nomineestockholder. 11 On March 18, 1992, respondent Sandiganbayan promulgated the Resolution, herein questioned, denying the exclusion of petitioners in PCGG Case No. 33, for their refusal to comply with the conditions required by respondent PCGG. It held: x x x x x x x x x ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e. their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client. This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein. 5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified his principal, which revelation could show the lack of cause against him. This in turn has allowed the PCGG to exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72). The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not to make the disclosures required by the PCGG. The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party defendants. In the same vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco. Neither can this Court. WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit. 12 ACCRA lawyers moved for a reconsideration of the above resolution but the same was denied by the respondent Sandiganbayan. Hence, the ACCRA lawyers filed the petition for certiorari, docketed as G.R. No. 105938, invoking the following grounds: I The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who undisputably acted as lawyers in serving as nomineestockholders, to the strict application of the law of agency. II The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving of equal treatment. 1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s) for whom he acted as nomineestockholder. 2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s), the disclosure does not constitute a substantial distinction as would make the classification reasonable under the equal protection clause. 3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco in violation of the equal protection clause. III The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case, the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the other information requested by the PCGG. 1. Under the peculiar facts of this case, the attorneyclient privilege includes the identity of the client(s). 2. The factual disclosures required by the PCGG are not limited to the identity of petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters. IV The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of partydefendants by the PCGG must be based on reasonable and just grounds and with due consideration to the constitutional right of petitioners ACCRA lawyers to the equal protection of the law. Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of the March 18, 1991 resolution which was denied by respondent Sandiganbayan. Thus, he filed a separate petition for certiorari, docketed as G.R. No. 108113, assailing respondent Sandiganbayan's resolution on essentially the same grounds averred by petitioners in G.R. No. 105938. Petitioners contend that the exclusion of respondent Roco as party-defendant in PCGG Case No. 33 grants him a favorable treatment, on the pretext of his alleged undertaking to divulge the identity of his client, giving him an advantage over them who are in the same footing as partners in the ACCRA law firm. Petitioners further argue that even granting that such an undertaking has been assumed by private respondent Roco, they are

prohibited from revealing the identity of their principal under their sworn mandate and fiduciary duty as lawyers to uphold at all times the confidentiality of information obtained during such lawyerclient relationship. Respondent PCGG, through its counsel, refutes petitioners' contention, alleging that the revelation of the identity of the client is not within the ambit of the lawyer-client confidentiality privilege, nor are the documents it required (deeds of assignment) protected, because they are evidence of nominee status. 13 In his comment, respondent Roco asseverates that respondent PCGG acted correctly in excluding him as partydefendant because he "(Roco) has not filed an Answer. PCGG had therefore the right to dismiss Civil Case No. 0033 as to Roco 'without an order of court by filing a notice of dismissal," 14 and he has undertaken to identify his principal. 15 Petitioners' contentions are impressed with merit. I It is quite apparent that petitioners were impleaded by the PCGG as co-defendants to force them to disclose the identity of their clients. Clearly, respondent PCGG is not after petitioners but the "bigger fish" as they say in street parlance. This ploy is quite clear from the PCGG's willingness to cut a deal with petitioners - the names of their clients in exchange for exclusion from the complaint. The statement of the Sandiganbayan in its questioned resolution dated March 18, 1992 is explicit: ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e., their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client. This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein. (Italics ours) In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third Division, entitled "Primavera Farms, Inc., et al. vs. Presidential Commission on Good Government'' respondent PCGG, through counsel Mario Ongkiko, manifested at the hearing on December 5, 1991 that the PCGG wanted to establish through the ACCRA that their 64 so called client is Mr. Eduardo Cojuangco"; that "it was Mr. Eduardo Cojuangco who furnished all the monies to those subscription payments in corporations included in Annex "A" of the Third Amended Complaint; that the ACCRA lawyers executed deeds of trust and deeds of assignment, some in the name of particular persons, some in blank. We quote Atty. Ongkiko: ATTY. ONGKIKO: With the permission of this Hon. Court. I propose to establish through these ACCRA lawyers that, one, their socalled client is Mr. Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco who furnished all the monies to these subscription payments of these corporations who are now the petitioners in this case. Third, that these lawyers executed deeds of trust, some in the name of a particular person, some in blank. Now, these blank deeds are important to our claim that some of the shares are actually being held by the nominees for the late President Marcos. Fourth, they also executed deeds of assignment and some of these assignments have also blank assignees. Again, this is important to our claim that some of the shares are for Mr. Cojuangco and some are for Mr. Marcos. Fifth, that most of these corporations are really just paper corporations. Why do we say that? One: There are no really fixed sets of officers, no fixed sets of directors at the time of incorporation and even up to 1986, which is the crucial year. And not only that, they have no permits from the municipal authorities in Makati. Next, actually all their addresses now are care of Villareal Law Office. They really have no address on records. These are some of the principal things that we would ask of these nominees stockholders, as they called themselves.16 It would seem that petitioners are merely standing in for their clients as defendants in the complaint. Petitioners are being prosecuted solely on the basis of activities and services performed in the course of their duties as lawyers. Quite obviously, petitioners' inclusion as co-defendants in the complaint is merely being used as leverage to compel them to name their clients and consequently to enable the PCGG to nail these clients. Such being the case, respondent PCGG has no valid cause of action as against petitioners and should exclude them from the Third Amended Complaint. II The nature of lawyer-client relationship is premised on the Roman Law concepts of locatio conductio operarum (contract of lease of services) where one person lets his services and another hires them without reference to the object of which the services are to be performed, wherein lawyers' services may be compensated by honorarium or for hire, 17 and mandato (contract of agency) wherein a friend on whom reliance could be placed makes a contract in his name, but gives up all that he gained by the contract to the person who requested him. 18 But the lawyer-client relationship is more than that of the principal-agent and lessor-lessee. In modem day perception of the lawyer-client relationship, an attorney is more than a mere agent or servant, because he possesses special powers of trust and confidence reposed on him by his client. 19 A lawyer is also as independent as the judge of the court, thus his powers are entirely different from and superior to those of an ordinary agent. 20 Moreover, an attorney also occupies what may be considered as a "quasijudicial office" since he is in fact an officer of the Court21 and exercises his judgment in the choice of courses of action to be taken favorable to his client. Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith, 22 that is required by reason of necessity and

public interest 23 based on the hypothesis that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice. 24 It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in society. This conception is entrenched and embodies centuries of established and stable tradition. 25 In Stockton v. Ford,26 the U.S. Supreme Court held: There are few of the business relations of life involving a higher trust and confidence than that of attorney and client, or generally speaking, one more honorably and faithfully discharged; few more anxiously guarded by the law, or governed by the sterner principles of morality and justice; and it is the duty of the court to administer them in a corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it. 27 In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by the Philippine Commission on August 7, 1901. Section 383 of the Code specifically "forbids counsel, without authority of his client to reveal any communication made by the client to him or his advice given thereon in the course of professional employment." 28 Passed on into various provisions of the Rules of Court, the attorney-client privilege, as currently worded provides: Sec. 24. Disqualification by reason of privileged communication. The following persons cannot testify as to matters learned in confidence in the following cases: x x x x x x x x x An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of, or with a view to, professional employment, can an attorney's secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any fact the knowledge of which has been acquired in such capacity. 29 Further, Rule 138 of the Rules of Court states: Sec. 20. It is the duty of an attorney: (e) to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client's business except from him or with his knowledge and approval. This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility which provides that: Canon 17. A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him. Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client: The lawyer owes "entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability," to the end that nothing be taken or be withheld from him, save by the rules of law, legally applied. No fear of judicial disfavor or public popularity should restrain him from the full discharge of his duty, In the judicial forum the client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land, and he may expect his lawyer to assert every such remedy or defense. But it is steadfastly to be borne in mind that the great trust of the lawyer is to be performed within and not without the bounds of the law. The office of attorney does not permit, much less does it demand of him for any client, violation of law or any manner of fraud or chicanery. He must obey his own conscience and not that of his client. Considerations favoring confidentiality in lawyer-client relationships are many and serve several constitutional and policy concerns. In the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If a client were made to choose between legal representation without effective communication and disclosure and legal representation with all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the right to counsel. If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed thereby rendering the right practically nugatory. The threat this represents against another sacrosanct individual right, the right to be presumed innocent is at once self-evident. Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would otherwise be circumscribed by limited information engendered by a fear of disclosure. An effective lawyer-client relationship is largely dependent upon the degree of confidence which exists between lawyer and client which in turn requires a situation which encourages a dynamic and fruitful exchange and flow of information. It necessarily follows that in order to attain effective representation, the lawyer must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility. The question now arises whether or not this duty may be asserted in refusing to disclose the name of petitioners' client(s) in the case at bar. Under the facts and circumstances obtaining in the instant case, the answer must be in the affirmative. As a matter of public policy, a client's identity should not be shrouded in mystery. 30 Under this premise, the general rule in our jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of his client. 31 The reasons advanced for the general rule are well established. First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood. Second, the privilege begins to exist only after the attorneyclient relationship has been established. The attorney-client privilege does not attach until there is a client. Third, the privilege generally pertains to the subject matter of the relationship.

Finally, due process considerations require that the opposing party should, as a general rule, know his adversary. "A party suing or sued is entitled to know who his opponent is." 32 He cannot be obliged to grope in the dark against unknown forces.33 Notwithstanding these considerations, the general rule is however qualified by some important exceptions. 1) Client identity is privileged where a strong probability exists that revealing the client's name would implicate that client in the very activity for which he sought the lawyer's advice. In Ex-Parte Enzor 34 a state supreme court reversed a lower court order requiring a lawyer to divulge the name of her client on the ground that the subject matter of the relationship was so closely related to the issue of the client's identity that the privilege actually attached to both. In Enzor, the unidentified client, an election official, informed his attorney in confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end. In her testimony, the attorney revealed that she had advised her client to count the votes correctly, but averred that she could not remember whether her client had been, in fact, bribed. The lawyer was cited for contempt for her refusal to reveal his client's identity before a grand jury. Reversing the lower court's contempt orders, the state supreme court held that under the circumstances of the case, and under the exceptions described above, even the name of the client was privileged. U.S. v. Hodge and Zweig, 35 involved the same exception, i.e. that client identity is privileged in those instances where a strong probability exists that the disclosure of the client's identity would implicate the client in the very criminal activity for which the lawyer's legal advice was obtained. The Hodge case involved federal grand jury proceedings inquiring into the activities of the "Sandino Gang," a gang involved in the illegal importation of drugs in the United States. The respondents, law partners, represented key witnesses and suspects including the leader of the gang, Joe Sandino. In connection with a tax investigation in November of 1973, the IRS issued summons to Hodge and Zweig, requiring them to produce documents and information regarding payment received by Sandino on behalf of any other person, and vice versa. The lawyers refused to divulge the names. The Ninth Circuit of the United States Court of Appeals, upholding non-disclosure under the facts and circumstances of the case, held: A client's identity and the nature of that client's fee arrangements may be privileged where the person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought Baird v. Koerner, 279 F.2d at 680. While in Baird Owe enunciated this rule as a matter of California law, the rule also reflects federal law. Appellants contend that the Baird exception applies to this case. The Baird exception is entirely consonant with the principal policy behind the attorney-client privilege. "In order to promote freedom of consultation of legal advisors by clients, the apprehension of compelled disclosure from the legal advisors must be removed; hence, the law must prohibit such disclosure except on the client's consent." 8 J. Wigmore, supra Sec. 2291, at 545. In furtherance of this policy, the client's identity and the nature of his fee arrangements are, in exceptional cases, protected as confidential communications. 36 2) Where disclosure would open the client to civil liability, his identity is privileged. For instance, the peculiar facts and circumstances of Neugass v. Terminal Cab Corporation, 37 prompted the New York Supreme Court to allow a lawyer's claim to the effect that he could not reveal the name of his client because this would expose the latter to civil litigation. In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was riding, owned by respondent corporation, collided with a second taxicab, whose owner was unknown. Plaintiff brought action both against defendant corporation and the owner of the second cab, identified in the information only as John Doe. It turned out that when the attorney of defendant corporation appeared on preliminary examination, the fact was somehow revealed that the lawyer came to know the name of the owner of the second cab when a man, a client of the insurance company, prior to the institution of legal action, came to him and reported that he was involved in a car accident. It was apparent under the circumstances that the man was the owner of the second cab. The state supreme court held that the reports were clearly made to the lawyer in his professional capacity. The court said: That his employment came about through the fact that the insurance company had hired him to defend its policyholders seems immaterial. The attorney in such cases is clearly the attorney for the policyholder when the policyholder goes to him to report an occurrence contemplating that it would be used in an action or claim against him. 38 x x x x x x x x x. All communications made by a client to his counsel, for the purpose of professional advice or assistance, are privileged, whether they relate to a suit pending or contemplated, or to any other matter proper for such advice or aid; x x x And whenever the communication made, relates to a matter so connected with the employment as attorney or counsel as to afford presumption that it was the ground of the address by the client, then it is privileged from disclosure. x x x. It appears ... that the name and address of the owner of the second cab came to the attorney in this case as a confidential communication. His client is not seeking to use the courts, and his address cannot be disclosed on that theory, nor is the present action pending against him as service of the summons on him has not been effected. The objections on which the court reserved decision are sustained. 39 In the case of Matter of Shawmut Mining Company, 40 the lawyer involved was required by a lower court to disclose whether he represented certain clients in a certain transaction.

The purpose of the court's request was to determine whether the unnamed persons as interested parties were connected with the purchase of properties involved in the action. The lawyer refused and brought the question to the State Supreme Court. Upholding the lawyer's refusal to divulge the names of his clients the court held: If it can compel the witness to state, as directed by the order appealed from, that he represented certain persons in the purchase or sale of these mines, it has made progress in establishing by such evidence their version of the litigation. As already suggested, such testimony by the witness would compel him to disclose not only that he was attorney for certain people, but that, as the result of communications made to him in the course of such employment as such attorney, he knew that they were interested in certain transactions. We feel sure that under such conditions no case has ever gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client. 41 3) Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client's name is privileged. In Baird vs. Korner, 42 a lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the U.S. Internal Revenue Service (IRS). It appeared that the taxpayer's returns of previous years were probably incorrect and the taxes understated. The clients themselves were unsure about whether or not they violated tax laws and sought advice from Baird on the hypothetical possibility that they had No investigation was then being undertaken by the IRS of the taxpayers. Subsequently, the attorney of the taxpayers delivered to Baird the sum of $12,706.85, which had been previously assessed as the tax due, and another amount of money representing his fee for the advice given. Baird then sent a check for $12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the payment, but without naming his clients. The IRS demanded that Baird identify the lawyers, accountants, and other clients involved. Baird refused on the ground that he did not know their names, and declined to name the attorney and accountants because this constituted privileged communication. A petition was filed for the enforcement of the IRS summons. For Baird's repeated refusal to name his clients he was found guilty of civil contempt. The Ninth Circuit Court of Appeals held that, a lawyer could not be forced to reveal the names of clients who employed him to pay sums of money to the government voluntarily in settlement of undetermined income taxes, unsued on, and with no government audit or investigation into that client's income tax liability pending. The court emphasized the exception that a client's name is privileged when so much has been revealed concerning the legal services rendered that the disclosure of the client's identity exposes him to possible investigation and sanction by government agencies. The Court held: The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some one or more years in the past. The names of the clients are useful to the government for but one purpose - to ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several years. The voluntary nature of the payment indicates a belief by the taxpayers that more taxes or interest or penalties are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here involved was employed - to advise his clients what, under the circumstances, should be done. 43 Apart from these principal exceptions, there exist other situations which could qualify as exceptions to the general rule. For example, the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal problem on which the client seeks legal assistance, 44 Moreover, where the nature of the attorney-client relationship has been previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged, since such revelation would otherwise result in disclosure of the entire transaction. 45 Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client's name itself has an independent significance, such that disclosure would then reveal client confidences. 46 The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to establish said client's connection with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorneyclient relationship). The link between the alleged criminal offense and the legal advice or legal service sought was duly established in the case at bar, by no less than the PCGG itself The key lies in the three specific conditions laid down by the PCGG which constitutes petitioners' ticket to non-prosecution should they accede thereto: (a) the disclosure of the identity of its clients; (b) submission of documents substantiating the lawyerclient relationship; and (c) the submission of the deeds of assignment petitioners executed in favor of their clients covering their respective shareholdings.

From these conditions, particularly the third, we can readily deduce that the clients indeed consulted the petitioners, in their capacity as lawyers, regarding the financial and corporate structure, framework and set-up of the corporations in question. In turn, petitioners gave their professional advice in the form of, among others, the aforementioned deeds of assignment covering their client's shareholdings. There is no question that the preparation of the aforestated documents was part and parcel of petitioners' legal service to their clients. More important, it constituted an integral part of their duties as lawyers. Petitioners, therefore, have a legitimate fear that identifying their clients would implicate them in the very activity for which legal advice had been sought, i.e., the alleged accumulation of ill-gotten wealth in the aforementioned corporations. Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the words of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a ... crime." 47 An important distinction must be made between a case where a client takes on the services of an attorney, for illicit purposes, seeking advice about how to go around the law for the purpose of committing illegal activities and a case where a client thinks he might have previously committed something illegal and consults his attorney about it. The first case clearly does not fall within the privilege because the same cannot be invoked for purposes illegal. The second case falls within the exception because whether or not the act for which the client sought advice turns out to be illegal, his name cannot be used or disclosed if the disclosure leads to evidence, not yet in the hands of the prosecution, which might lead to possible action against him. These cases may be readily distinguished, because the privilege cannot be invoked or used as a shield for an illegal act, as in the first example; while the prosecution may not have a case against the client in the second example and cannot use the attorney client relationship to build up a case against the latter. The reason for the first rule is that it is not within the professional character of a lawyer to give advice on the commission of a crime. 48 The reason for the second has been stated in the cases above discussed and are founded on the same policy grounds for which the attorney-client privilege, in general, exists. In Matter of Shawmut Mining Co., supra, the appellate court therein stated that "under such conditions no case has ever yet gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client." 49 "Communications made to an attorney in the course of any personal employment, relating to the subject thereof and which may be supposed to be drawn out in consequence of the relation in which the parties stand to each other, are under the seal of confidence and entitled to protection as privileged communications." 50 Where the communicated information, which clearly falls within the privilege, would suggest possible criminal activity but there would be not much in the information known to the prosecution which would sustain a charge except that revealing the name of the client would open up other privileged information which would substantiate the prosecution's suspicions, then the client's identity is so inextricably linked to the subject matter itself that it falls within the protection. The Baird exception, applicable to the instant case, is consonant with the principal policy behind the privilege, i.e., that for the purpose of promoting freedom of consultation of legal advisors by clients, apprehension of compelled disclosure from attorneys must be eliminated. This exception has likewise been sustained in In re Grand Jury Proceedings 51 and Tillotson v. Boughner. 52 What these cases unanimously seek to avoid is the exploitation of the general rule in what may amount to a fishing expedition by the prosecution. There are, after all, alternative sources of information available to the prosecutor which do not depend on utilizing a defendant's counsel as a convenient and readily available source of information in the building of a case against the latter. Compelling disclosure of the client's name in circumstances such as the one which exists in the case at bench amounts to sanctioning fishing expeditions by lazy prosecutors and litigants which we cannot and will not countenance. When the nature of the transaction would be revealed by disclosure of an attorney's retainer, such retainer is obviously protected by the privilege. 53 It follows that petitioner attorneys in the instant case owe their client(s) a duty and an obligation not to disclose the latter's identity which in turn requires them to invoke the privilege. In fine, the crux of petitioner's objections ultimately hinges on their expectation that if the prosecution has a case against their clients, the latter's case should be built upon evidence painstakingly gathered by them from their own sources and not from compelled testimony requiring them to reveal the name of their clients, information which unavoidably reveals much about the nature of the transaction which may or may not be illegal. The logical nexus between name and nature of transaction is so intimate in this case that it would be difficult to simply dissociate one from the other. In this sense, the name is as much "communication" as information revealed directly about the transaction in question itself, a communication which is clearly and distinctly privileged. A lawyer cannot reveal such communication without exposing himself to charges of violating a principle which forms the bulwark of the entire attorney-client relationship. The uberrimei fidei relationship between a lawyer and his client therefore imposes a strict liability for negligence on the former. The ethical duties owing to the client, including confidentiality, loyalty, competence, diligence as well as the responsibility to keep clients informed and protect their rights to make decisions have been zealously sustained. In Milbank, Tweed, Hadley and McCloy v. Boon, 54 the US Second District Court rejected the plea of the petitioner law firm that it breached its fiduciary duty to its client by helping the latter's former agent in closing a deal for the agent's benefit only after its client hesitated in proceeding with the transaction, thus causing no harm to its client. The Court instead ruled that breaches of a fiduciary relationship in any context

comprise a special breed of cases that often loosen normally stringent requirements of causation and damages, and found in favor of the client. To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley P.A. v. Scheller 55 requiring strict obligation of lawyers vis-a-vis clients. In this case, a contingent fee lawyer was fired shortly before the end of completion of his work, and sought payment quantum meruit of work done. The court, however, found that the lawyer was fired for cause after he sought to pressure his client into signing a new fee agreement while settlement negotiations were at a critical stage. While the client found a new lawyer during the interregnum, events forced the client to settle for less than what was originally offered. Reiterating the principle of fiduciary duty of lawyers to clients in Meinhard v. Salmon 56 famously attributed to Justice Benjamin Cardozo that "Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior," the US Court found that the lawyer involved was fired for cause, thus deserved no attorney's fees at all. The utmost zeal given by Courts to the protection of the lawyer-client confidentiality privilege and lawyer's loyalty to his client is evident in the duration of the protection, which exists not only during the relationship, but extends even after the termination of the relationship. 57 Such are the unrelenting duties required of lawyers visa-vis their clients because the law, which the lawyers are sworn to uphold, in the words of Oliver Wendell Holmes, 58 "x x x is an exacting goddess, demanding of her votaries in intellectual and moral discipline." The Court, no less, is not prepared to accept respondents' position without denigrating the noble profession that is lawyering, so extolled by Justice Holmes in this wise: Every calling is great when greatly pursued. But what other gives such scope to realize the spontaneous energy of one's soul? In what other does one plunge so deep in the stream of life - so share its passions its battles, its despair, its triumphs, both as witness and actor? x x x But that is not all. What a subject is this in which we are united this abstraction called the Law, wherein as in a magic mirror, we see reflected, not only in our lives, but the lives of all men that have been. When I think on this majestic theme my eyes dazzle. If we are to speak of the law as our mistress, we who are here know that she is a mistress only to be won with sustained and lonely passion - only to be won by straining all the faculties by which man is likened to God. We have no choice but to uphold petitioners' right not to reveal the identity of their clients under pain of the breach of fiduciary duty owing to their clients, because the facts of the instant case clearly fall within recognized exceptions to the rule that the client's name is not privileged information. If we were to sustain respondent PCGG that the lawyerclient confidential privilege under the circumstances obtaining here does not cover the identity of the client, then it would expose the lawyers themselves to possible litigation by their clients in view of the strict fiduciary responsibility imposed on them in the exercise of their duties. The complaint in Civil Case No. 0033 alleged that the defendants therein, including herein petitioners and Eduardo Cojuangco, Jr. conspired with each other in setting up through the use of coconut levy funds the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM and others and that through insidious means and machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total capital stock of UCPB as of 31 March 1987. The PCGG wanted to establish through the ACCRA lawyers that Mr. Cojuangco is their client and it was Cojuangco who furnished all the monies to the subscription payment; hence, petitioners acted as dummies, nominees and/or agents by allowing themselves, among others, to be used as instrument in accumulating ill-gotten wealth through government concessions, etc., which acts constitute gross abuse of official position and authority, flagrant breach of public trust, unjust enrichment, violation of the Constitution and laws of the Republic of the Philippines. By compelling petitioners, not only to reveal the identity of their clients, but worse, to submit to the PCGG documents substantiating the client-lawyer relationship, as well as deeds of assignment petitioners executed in favor of its clients covering their respective shareholdings, the PCGG would exact from petitioners a link, "that would inevitably form the chain of testimony necessary to convict the (client) of a crime." III In response to petitioners' last assignment of error, respondents allege that the private respondent was dropped as party defendant not only because of his admission that he acted merely as a nominee but also because of his undertaking to testify to such facts and circumstances "as the interest of truth may require, which includes ... the identity of the principal."59 First, as to the bare statement that private respondent merely acted as a lawyer and nominee, a statement made in his out-of-court settlement with the PCGG, it is sufficient to state that petitioners have likewise made the same claim not merely out-of-court but also in their Answer to plaintiff's Expanded Amended Complaint, signed by counsel, claiming that their acts were made in furtherance of "legitimate lawyering." 60 Being "similarly situated" in this regard, public respondents must show that there exist other conditions and circumstances which would warrant their treating the private respondent differently from petitioners in the case at bench in order to evade a violation of the equal protection clause of the Constitution. To this end, public respondents contend that the primary consideration behind their decision to sustain the PCGG's dropping of private respondent as a defendant was his promise to disclose the identities of the clients in question. However, respondents failed to show - and absolutely nothing exists in the records of the case at bar that private respondent actually revealed the identity of his client(s) to the PCGG. Since the undertaking happens to be the leitmotif of the entire arrangement between Mr. Roco and the PCGG, an undertaking which is so material as to have justified PCGG's special treatment exempting the private respondent from prosecution, respondent Sandiganbayan should have required proof of the undertaking more substantial than a "bare

assertion" that private respondent did indeed comply with the undertaking. Instead, as manifested by the PCGG, only three documents were submitted for the purpose, two of which were mere requests for re-investigation and one simply disclosed certain clients which petitioners (ACCRA lawyers) were themselves willing to reveal. These were clients to whom both petitioners and private respondent rendered legal services while all of them were partners at ACCRA, and were not the clients which the PCGG wanted disclosed for the alleged questioned transactions. 61 To justify the dropping of the private respondent from the case or the filing of the suit in the respondent court without him, therefore, the PCGG should conclusively show that Mr. Roco was treated as a species apart from the rest of the ACCRA lawyers on the basis of a classification which made substantial distinctions based on real differences. No such substantial distinctions exist from the records of the case at bench, in violation of the equal protection clause. The equal protection clause is a guarantee which provides a wall of protection against uneven application of statutes and regulations. In the broader sense, the guarantee operates against uneven application of legal norms so that all persons under similar circumstances would be accorded the same treatment. 62 Those who fall within a particular class ought to be treated alike not only as to privileges granted but also as to the liabilities imposed. x x x What is required under this constitutional guarantee is the uniform operation of legal norms so that all persons under similar circumstances would be accorded the same treatment both in the privileges conferred and the liabilities imposed. As was noted in a recent decision: 'Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances, which if not identical are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding the rest. 63 We find that the condition precedent required by the respondent PCGG of the petitioners for their exclusion as parties-defendants in PCGG Case No. 33 violates the lawyerclient confidentiality privilege. The condition also constitutes a transgression by respondents Sandiganbayan and PCGG of the equal protection clause of the Constitution. 64 it is grossly unfair to exempt one similarly situated litigant from prosecution without allowing the same exemption to the others. Moreover, the PCGG's demand not only touches upon the question of the identity of their clients but also on documents related to the suspected transactions, not only in violation of the attorney-client privilege but also of the constitutional right against self-incrimination. Whichever way one looks at it, this is a fishing expedition, a free ride at the expense of such rights. An argument is advanced that the invocation by petitioners of the privilege of attorney-client confidentiality at this stage of the proceedings is premature and that they should wait until they are called to testify and examine as witnesses as to matters learned in confidence before they can raise their objections, But petitioners are not mere witnesses. They are co-principals in the case for recovery of alleged ill-gotten wealth. They have made their position clear from the very beginning that they are not willing to testify and they cannot be compelled to testify in view of their constitutional right against self-incrimination and of their fundamental legal right to maintain inviolate the privilege of attorney-client confidentiality. It is clear then that the case against petitioners should never be allowed to take its full course in the Sandiganbayan. Petitioners should not be made to suffer the effects of further litigation when it is obvious that their inclusion in the complaint arose from a privileged attorney-client relationship and as a means of coercing them to disclose the identities of their clients. To allow the case to continue ,with respect to them when this Court could nip the problem in the bud at this early opportunity would be to sanction an unjust situation which we should not here countenance. The case hangs as a real and palpable threat, a proverbial Sword of Damocles over petitioners' heads., It should not be allowed to continue a day longer. While we are aware of respondent PCGG's legal mandate to recover ill-gotten wealth, we will not sanction acts which violate the equal protection guarantee and the right against self-incrimination and subvert the lawyer-client confidentiality privilege. WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of respondent Sandiganbayan (First Division) promulgated on March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET ASIDE. Respondent Sandiganbayan is further ordered to execute petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Conception, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini as parties-defendants in SB Civil Case No. 0033 entitled "Republic of the Philippines v. Eduardo Cojuangco, Jr., et al." SO ORDERED. Bellosillo, Melo and Francisco, JJ., concur. Vitug, J., see separate opinion. Padilla, Panganiban and Torres, Jr., JJ., concur in the result. Davide, Jr. and Puno, JJ., dissents. Narvasa, C.J. and Regalado, J., join Justice Davide in his dissent. Romero, J., no part. Related to PCGG Commissioner when Civil Case No. 0033 was filed. Hermosisima, Jr., J., no part. Participated in Sandiganbayan deliberations thereon. Mendoza, J., on leave. VITUG, J., separate opinion: The legal profession, despite all the unrestrained calumny hurled against it, is still the noblest of professions. It exists upon the thesis that, in an orderly society that is opposed to all forms of anarchy, it so occupies, as it

should, an exalted position in the proper dispensation of justice. In time, principles have evolved that would help ensure its effective ministration. The protection of confidentiality of the lawyer-client relationship is one, and it has since been an accepted firmanent in the profession. It allows the lawyer and the client to institutionalize a unique relationship based on full trust and confidence essential in a justice system that works on the basis of substantive and procedural due process. To be sure, the rule is not without its pitfalls, and demands against it may be strong, but these problems are, in the ultimate analysis, no more than mere tests of vigor that have made and will make that rule endure. I see in the case before us, given the attendant circumstances already detailed in the ponencia, a situation of the Republic attempting to establish a case not on what it perceives to be the strength of its own evidence but on what it could elicit from a counsel against his client. I find it unreasonable for the Sandiganbayan to compel petitioners to breach the trust reposed on them and succumb to a thinly disguised threat of incrimination. Accordingly, I join my other colleague who vote for the GRANT of the petition, DAVIDE, JR., J., dissenting: The impressive presentation of the case in the ponencia of Mr, Justice Kapunan makes difficult the espousal of a dissenting view. Nevertheless, I do not hesitate to express that view because I strongly feel that this Court must confine itself to the key issue in this special civil action for certiorari, viz., whether or not the Sandiganbayan acted with grave abuse of discretion in not excluding the defendants, the petitioners herein, from the Third Amended Complaint in Civil Case No. 0033. That issue, unfortunately, has been simply buried under the avalanche of authorities upholding the sanctity of lawyer-client relationship which appears to me to be prematurely invoked. From the undisputed facts disclosed by the pleadings and summarized in the ponencia, I cannot find my way clear to a conclusion that the Sandiganbayan committed grave abuse of discretion in not acting favorably on the petitioners' prayer in their Comment to the PCGG's Motion to Admit Third Amended Complaint. The prerogative to determine who shall be made defendants in a civil case is initially vested in the plaintiff, or the PCGG in this case. The control of the Court comes in only when the issue of "interest" (2, Rule 3, Rules of Court) as, e.g., whether an indispensable party has not been joined, or whether there is a misjoinder of parties (7, 8, and 9, Id.), is raised. In the case below, the PCGG decided to drop or exclude from the complaint original co-defendant Raul Roco because he had allegedly complied with the condition prescribed by the PCGG, viz., undertake that he will reveal the identity of the principals for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 0033. In short, there was an agreement or compromise settlement between the PCGG and Roco. Accordingly, the PCGG submitted a Third Amended Complaint without Roco as a defendant. No obstacle to such an agreement has been insinuated. If Roco's revelation violated the confidentiality of a lawyer-client relationship, he would be solely answerable therefor to his principals/clients and, probably, to this Court in an appropriate disciplinary action if warranted. There is at all no showing that Civil Case No. 0033 cannot further be proceeded upon or that any judgment therein cannot be binding without Roco remaining as a defendant. Accordingly, the admission of the Third Amended Complaint cannot be validly withheld by the Sandiganbayan. Are the petitioners, who did not file a formal motion to be excluded but only made the request to that effect as a rider to their Comment to the Motion to Admit Third Amended Complaint, entitled to be excluded from the Third Amended Complaint such that denial thereof would constitute grave abuse of discretion on the Sandiganbayan's part? To me, the answer is clearly in the negative. The petitioners seek to be accorded the same benefit granted to or to be similarly treated as Roco. Reason and logic dictate that they cannot, unless they too would make themselves like Roco. Otherwise stated, they must first voluntarily adopt for themselves the factual milieu created by Roco and must bind themselves to perform certain obligations as Roco. It is precisely for this that in response to the petitioners' comment on the aforementioned Motion to Admit Third Amended Complaint the PCGG manifested that it is willing to accord the petitioners the treatment it gave Roco provided they would do what Roco had done, that is, disclose the identity of their principals/clients and submit documents substantiating their claimed lawyer-client relationship with the said principals/clients, as well as copies of deeds of assignments the petitioners executed in favor of their principals/clients. The petitioners did not do so because they believed that compliance thereof would breach the sanctity of their fiduciary duty in a lawyer-client relationship. It, indeed, appears, that Roco has complied with his obligation as a consideration for his exclusion from the Third Amended Complaint. The Sandiganbayan found that 5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified his principal, which revelation could show the lack of action against him. This in turn has allowed the PCGG to exercise its power both under the rules of agency and under Section 5 of E. O. No. 14-1 in relation to the Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72). As a matter of fact, the PCGG presented evidence to substantiate Roco's compliance, The ponencia itself so stated, thus: x x x respondent PCGG presented evidence to substantiate compliance by private respondent Roco of the conditions precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of Roco, Bunag, and Kapunan Law

Offices dated September 21, 1988 to the respondent in behalf of private respondent Roco originally requesting the reinvestigation and/ or re-examination of evidence by the PCGG it Complaint in PCGG Case No. 33. (Id., 5-6). These are the pieces of evidence upon which the Sandiganbayan founded its conclusion that the PCGG was satisfied with Roco's compliance. The petitioners have not assailed such finding as arbitrary. The ponencia's observation then that Roco did not refute the petitioners' contention that he did not comply with his obligation to disclose the identity of his principals is entirely irrelevant. In view of their adamantine position, the petitioners did not, therefore, allow themselves to be like Roco. They cannot claim the same treatment, much less compel the PCGG to drop them as defendants, for nothing whatsoever. They have no right to make such a demand for until they shall have complied with the conditions imposed for their exclusion, they cannot be excluded except by way of a motion to dismiss based on the grounds allowed by law (e.g., those enumerated in 1, Rule 16, Rules of Court). The rule of confidentially under the lawyer-client relationship is not a cause to exclude a party. It is merely a ground for disqualification of a witness (24, Rule 130, Rules of Court) and may only be invoked at the appropriate time, i.e., when a lawyer is under compulsion to answer as witness, as when, having taken the witness stand, he is questioned as to such confidential communication or advice, or is being otherwise judicially coerced to produce, through subpoenae duces tecum or otherwise, letters or other documents containing the same privileged matter. But none of the lawyers in this case is being required to testify about or otherwise reveal "any [confidential] communication made by the client to him, or his advice given thereon in the course of, or with a view to, professional employment." What they are being asked to do, in line with their claim that they had done the acts ascribed to them in pursuance of their professional relation to their clients, is to identify the latter to the PCGG and the Court; but this, only if they so choose in order to be dropped from the complaint, such identification being the condition under which the PCGG has expressed willingness to exclude them from the action. The revelation is entirely optional, discretionary, on their part. The attorney-client privilege is not therefor applicable. Thus, the Sandiganbayan did not commit any abuse of discretion when it denied the petitioners' prayer for their exclusion as partydefendants because they did not want to abide with any of the conditions set by the PCGG. There would have been abuse if the Sandiganbayan granted the prayer because then it would have capriciously, whimsically, arbitrarily, and oppressively imposed its will on the PCGG. Again, what the petitioners want is their exclusion from the Third Amended Complaint or the dismissal of the case insofar as they are concerned because either they are invested with immunity under the principle of confidentially in a lawyer-client relationship, or the claims against them in Civil Case No. 0033 are barred by such principle. Even if we have to accommodate this issue, I still submit that the lawyer-client privilege provides the petitioners no refuge. They are sued as principal defendants in Civil Case No. 0033, a case for the recovery of alleged illgotten wealth. Conspiracy is imputed to the petitioners therein. In short, they are, allegedly, conspirators in the commission of the acts complained of for being nominees of certain parties. Their inclusion as defendants is justified under Section 15, Article XI of the Constitution - which provides that the right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches or estoppel - and E.O. No. I of 28 February 1986, E.O. No. 2 of 12 March 1986, E.O. No. 14 of 7 May 1986, and the Rules and Regulations of the PCGG. Furthermore, 2, Rule 110 of the Rules of Court requires that the complaint or information should be "against all persons who appear to be responsible for the offense involved." Hypothetically admitting the allegations in the complaint in Civil Case No. 0033, 1 find myself unable to agree with the majority opinion that the petitioners are immune from suit or that they have to be excluded as defendants, or that they cannot be compelled to reveal or disclose the identity of their principals, all because of the sacred lawyerclient privilege. This privilege is well put in Rule 130 of the Rules of Court, to wit: 24, Disqualification by reason of privileged communication. The following persons cannot testify as to matters learned in confidence in the following cases: x x x x x x x x x (b) An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of, or with a view to, professional employment, nor can an attorney's secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any fact the knowledge of which has been acquired in such capacity. The majority seeks to expand the scope of the Philippine rule on the lawyer-client privilege by copious citations of American jurisprudence which includes in the privilege the identity of the client under the exceptional situations narrated therein. From the plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of privilege contested therein arose in grand jury proceedings on different States, which are preliminary proceedings before the filing of the case in court, and we are not even told what evidentiary rules apply in the said hearings. In the present case, the privilege is invoked in the court where it was already filed and presently pends, and we have the foregoing specific rules above-quoted. Secondly, and more important, in the cases cited by the majority, the lawyers concerned were merely advocating the cause of their clients but were not indicted for the charges against their said clients. Here, the counsel themselves are co-defendants duly charged in court as co-conspirators in the offenses charged, The cases cited by the majority evidently do not apply to them. Hence, I wish to repeat and underscore the fact that the lawyer-client privilege is not a shield for the commission of a crime or against the prosecution of the lawyer therefor. I quote, with emphases supplied, from 81 AMJUR 2d, Witnesses, 393 to 395, pages 356-357:

393. Effect of unlawful purpose. The existence of an unlawful purpose prevents the attorneyclient privilege from attaching. The attorneyclient"privilege does not generally exist where the representation is sought to further criminal or fraudulent conduct either past, present, or future. Thus, a confidence received by an attorney in order to advance a criminal or fraudulent purpose is beyond the scope of the privilege. Observation: The common-law rule that the privilege protecting confidential communications between attorney and client is lost if the relation is abused by a client who seeks legal assistance to perpetrate a crime or fraud has been codified. 394. Attorney participation. The attorney-client privilege cannot be used to protect a client in the perpetration of a crime in concert with the attorney, even where the attorney is not aware of his client's purpose. The reason for the rule is that it is not within the professional character of a lawyer to give advice on the commission of crime. Professional responsibility does not countenance the use of the attorney-client privilege as a subterfuge, and all conspiracies, either active or passive, which are calculated to hinder the administration of justice will vitiate the privilege. In some jurisdictions, however, this exception to the rule of privilege is confined to such intended acts in violation of the law as are mala in se, as distinguished from those which are merely mala prohibita. 395. Communication in contemplation of crime. Communications between attorney and client having to do with the client's contemplated criminal acts, or in aid or furtherance thereof, are not covered by the cloak of privilege ordinarily existing in reference to communications between attorney and client. But, the mere charge of illegality, not supported by evidence, will not defeat the privilege; there must be at least prima facie evidence that the illegality has some foundation in fact. Underhill also states: There are many other cases to the same effect, for the rule is prostitution of the honorable relation of attorney and client will not be permitted under the guise of privilege, and every communication made to an attorney by a client for a criminal purpose is a conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the attorney under certain circumstances may be bound to disclose at once in the interest of justice. In accordance with this rule, where a forged will or other false instrument has come into possession of an attorney through the instrumentality of the accused, with the hope and expectation that the attorney would take some action in reference thereto, and the attorney does act, in ignorance of the true character of the instrument, there is no privilege, inasmuch as full confidence has been withheld. The attorney is then compelled to produce a forged writing against the client. The fact that the attorney is not cognizant of the criminal or wrongful purpose, or, knowing it, attempts to dissuade his client, is immaterial. The attorney's ignorance of his client's intentions deprives the information of a professional character as full confidence has been withheld. (H.C. Underhill, A Treatise on the Law of Criminal Evidence, vol, 2 Fifth ed. (1956), Sec. 332, pp. 836-837; italics mine). summarizes the rationale of the rule excepting communications with respect to contemplated criminal or fraudulent acts, thus: c. Rationale of rule excepting communications with respect to contemplated criminal or fraudulent act. Various reasons have been announced as being the foundation for the holdings that communications with respect to contemplated criminal or fraudulent acts are not privileged. The reason perhaps most frequently advanced is that in such cases there is no professional employment, properly speaking Standard F. Ins. Co. v, Smithhart (1919) 183 Ky 679, 211 SW. 441, 5 ALR 972; Cummings v. Com. (1927) 221 Ky 301, 298 SW 943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v, Van Alstine (1885) 57 Mich 69, 23 NW 594; Hamil & Co. v. England (1892) 50 Mo App 338; Carney v. United R, Co. (1920) 205 Mo App 495,226 SW 308; Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM Dec 287; People ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed without opinion in (1934) 242 App Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9 Hare 387, 68 Eng Reprint 558; Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751; Reg. v. Cox (18 84) LR 14 QB Div (Eng) 15 3 CCR; Re Postlethwaite (1887) LR 35 Ch Div (Eng) 722. In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 - CCR, the court said: "In order that the rule may apply, there must be both professional confidence and professional employment, but if the client has a criminal object in view in his communications with his solicitor one of these elements must necessarily be absent. The client must either conspire with his solicitor or deceive him. If his criminal object is avowed, the client does not consult his adviser professionally, because it cannot be the solicitor's business to further any criminal object. If the client does not avow his object, he reposes no confidence, for the state of facts which is the foundation of the supposed confidence does not exist. The solicitor's advice is obtained by a fraud." So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW 441, 5 ALR 972, the court said: "The reason of the principle which holds such communications not to be privileged is that it is not within the professional character of a lawyer to give advice upon such subjects, and that it is no part of the profession of an attorney or counselor at law to be advising persons as to how they may commit crimes or frauds, or how they may escape the consequences of contemplated crimes and frauds. If the crime or fraud has already been committed and finished, a client may advise with an attorney in regard to it, and communicate with him freely, and the communications cannot be divulged as evidence without the consent of the client, because it is a part of the business and duty of those engaged in the practice of the profession of law, when employed and relied upon for

that purpose, to give advice to those who have made infractions of the laws; and, to enable the attorney to properly advise and to properly represent the client in court or when prosecutions are threatened, it is conducive to the administration of justice that the client shall be free to communicate to his attorney all the facts within his knowledge, and that he may be assured that a communication made by him shall not be used to his prejudice." The protection which the law affords to communications between attorney and client has reference to those which are legitimately and properly within the scope of a lawful employment, and does not extend to communications made in contemplation of a crime, or perpetration of a fraud. Strong v. Abner (1937) 268 Ky 502, 105 SW (2d) 599. The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in holding not privileged communications to an attorney having for their object the commission of a crime, said. "They then partake of the nature of a conspiracy, or attempted conspiracy, and it is not only lawful to divulge such communications, but under certain circumstances it might become the duty of the attorney to do so. The interests of public justice require that no such shield from merited exposure shall be interposed to protect a person who takes counsel how he can safely commit a crime. The relation of attorney and client cannot exist for the purpose of counsel in concocting crimes." And in Coveney v. Tannahill (184 1) 1 Hill (NY) 3 3, 3 7 Am Dee 287, the court was of the opinion that there could be no such relation as that of attorney and client, either in the commission of a crime, or in the doing of a wrong by force or fraud to an individual, the privileged relation of attorney and client existing only for lawful and honest purposes. If the client consults the attorney at law with reference to the perpetration of a crime, and they co-operate in effecting it, there is no privilege, inasmuch as it is no part of the. lawyer's duty to aid in crime -- he ceases to be counsel and becomes a criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054. The court cannot permit it to be said that the contriving of a fraud forms part of the professional business of an attorney or solicitor. Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751. If the client does not frankly and freely reveal his object and intention as well as facts, there is not professional confidence, and therefore no privilege. Matthews v. Hoagland (NJ) supra. See to the same effect Carney v. United R. Co. (1920) 205 Mo App 495, 226 SW 308. There is no valid claim of privilege in regard to the production of documents passing between solicitor and client, when the transaction impeached is charged to be based upon fraud, that is the matter to be investigated, and it is thought better that the alleged privilege should suffer than that honestly and fair dealing should appear to be violated with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334. In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in Reg, v. Cox (1884) LR 14 QB Div (Eng) 172 CCR), the chief justice said: "I believe the law is, and properly is, that if a party consults an attorney, and obtains advice for what afterwards turns out to be the commission of a crime or a fraud, that a party so consulting the attorney has no privilege whatever to close the lips of the attorney from stating the truth. Indeed, if any such privilege should be contended for, or existing, it would work most grievous hardship on an attorney, who, after he had been consulted upon what subsequently appeared to be a manifest crime and fraud, would have his lips closed, and might place him in a very serious position of being suspected to be a party to the fraud, and without his having an opportunity of exculpating himself... There is no privilege in the case which I have suggested of a party consulting another, a professional man, as to what may afterwards turn out to be a crime or fraud, and the best mode of accomplishing it." In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question of privilege as to communications between attorney and client was not involved, the question directly involved being the competency of a clerk in a business establishment to testify as to certain information which he acquired while working in the establishment, the court strongly approved of a view as stated arguendo for plaintiff, in Annesley v. Anglesea (1743) 17 How St Tr (Eng) 1229, as follows: "I shall claim leave to consider whether an attorney may be examined as to any matter which came to his knowledge as an attorney. If he is employed as an attorney in any unlawful or wicked act, his duty to the public obliges him to disclose it; no private obligations can dispense with that universal one which lies on every member of society to discover every design which may be formed, contrary to the laws of society, to destroy the public welfare. For this reason, I apprehend that if a secret which is contrary to the public good, such as a design to commit treason, murder, or perjury, comes to the knowledge of an attorney, even in a cause where he is concerned, the obligation to the public must dispense with the private obligation to the client." The court in McMannus v. State (IS 5 8) 2 Head (Tenn) 2 13, said: "It would be monstrous to hold that if counsel was asked and obtained in reference to a contemplated crime that the lips of the attorney would be sealed, when the facts might become important to the ends of justice in the prosecution of crime. In such a case the relation cannot be taken to exist. Public policy would forbid it." And the court in Lanum v. Patterson (1909) 151 III App 36, observed that this rule was not in contravention of sound public policy, but on the contrary, tended to the maintenance of a higher standard of professional ethics by preventing the relation of attorney and client from operating as a cloak for fraud. Communications of a client to an attorney are not privileged if they were a request for advice as to how to commit a fraud, it being in such a case not only the attorney's privilege, but his duty, to disclose the facts to the court. Will v. Tornabells & Co. (1907) 3 Porto Rico Fed Rep 125. The court said: "We say this notwithstanding the comments of opposing counsel as to the indelicacy of his position because of his being now on the opposite side

of the issue that arose as a consequence of the communication he testifies about, and is interested in the cause to the extent of a large contingent fee, as he confesses." The object of prohibiting the disclosure of confidential communications is to protect the client, and not to make the attorney an accomplice or permit him to aid in the commission of a crime. People vs. Petersen (1901) 60 App Div 118, NYS 941. The seal of personal confidence can never be used to cover a transaction which is in itself a crime. People v. Fanner (1909) 194 NY 251, 87 NE 457. As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, 410 and 411, pages 366-368, states: 410. Name or identity of client. Disclosure of a client's identity is necessary proof of the existence of the attorney-client relationship and is not privileged information. Thus, the attorney-client privilege is inapplicable even though the information was communicated confidentially to the attorney in his professional capacity and, in some cases, in spite of the fact that the attorney may have been sworn to secrecy, where an inquiry is directed to an attorney as to the name or identity of his client. This general rule applies in criminal cases, as well as in civil actions. Where an undisclosed client is a party to an action, the opposing party has a right to know with whom he is contending or who the real party in interest is, if not the nominal adversary. 411. Disclosure of identity of client as breach of confidentiality. The revelation of the identification of a client is not usually considered privileged, except where so much has been divulged with regard to legal services rendered or the advice sought, that to reveal the client's name would be to disclose the whole relationship and confidential communications. However, even where the subject matter of the attorney-client relationship has already been revealed, the client's name has been deemed privileged. Where disclosure of the identity of a client might harm the client by being used against him under circumstances where there are no countervailing factors, then the identity is protected by the attorney-client privilege. In criminal proceedings, a client's name may be privileged if information already obtained by the tribunal, combined with the client's identity, might expose him to criminal prosecution for acts subsequent to, and because of, which he had sought the advice of his attorney. Although as a general rule, the identity of a defendant in a criminal prosecution is a matter of public record and, thus, not covered by the attorney-client privilege, where the attorney has surrendered to the authorities physical evidence in his possession by way of the attorney-client relationship, the state must prove the connection between the piece of physical evidence and the defendant without in any way relying on the testimony of the client's attorney who initially received the evidence and, thus, the attorney may not be called to the stand and-asked to disclose the identity of the client. However, an attorney cannot refuse to reveal the identity of a person who asked him to deliver stolen property to the police department, whether a bona fide attorney-client relationship exists between them, inasmuch as the transaction was not a legal service or done in the attorney's professional capacity. Distinction: Where an attorney was informed by a male client that his female acquaintance was possibly involved in [a] hit-and-run accident, the identity of the female did not come within scope of attorney-client privilege although the. identity of the male client was protected. (italics supplied) WIGMORE explains why the identity of a client is not within the lawyer-client privilege in this matter: 2313. Identity of client or purpose of suit.- The identity of the attorney's client or the name of the real party in interest will seldom be a matter communicated in confidence because the procedure of litigation ordinarily presupposes a disclosure of these facts. Furthermore, so far as a client may in fact desire secrecy and may be able to secure action without appearing as a party to the proceedings, it would be improper to sanction such a wish. Every litigant is in justice entitled to know the identity of his opponents. He cannot be obliged to struggle in the dark against unknown forces, He has by anticipation the right, in later proceedings, if desired, to enforce the legal responsibility of those who may have maliciously sued or prosecuted him or fraudulently evaded his claim. He has as much right to ask the attorney "Who fees your fee?" as to ask the witness (966 supra). "Who maintains you during this trial?" upon the analogy of the principle already examined (2298 supra), the privilege cannot be used to evade a client's responsibility for the use of legal process. And if it is necessary for the purpose to make a plain exception to the rule of confidence, then it must be made. (Wigmore on Evidence, vol. 8, (1961), p. 609; emphases supplied). In 114 ALR, 13 22, we also find the following statement: 1. Name or identity. As is indicated in 28 R.C.L. p. 563, it appears that the rule making communications between attorney and client privileged from disclosure ordinarily does not apply where the inquiry is confined to the fact of the attorney's employment and the name of the person employing him, since the privilege presupposes the relationship of client and attorney, and therefore does not attach to its creation. At the present stage of the proceedings below, the petitioners have not shown that they are so situated with respect to their principals as to bring them within any of the exceptions established by American jurisprudence. There will be full opportunity for them to establish that fact at the trial where the broader perspectives of the case shall have been presented and can be better appreciated by the court. The insistence for their exclusion from the case is understandable, but the reasons for the hasty resolution desired is naturally suspect.

We do not even have to go beyond our shores for an authority that the lawyer-client privilege cannot be invoked to prevent the disclosure of a client's identity where the lawyer and the client are conspirators in the commission of a crime or a fraud. Under our jurisdiction, lawyers are mandated not to counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system (Rule 1.02, Canon, 1, Code of Professional Responsibility) and to employ only fair and honest means to attain the lawful objectives of his client (Rule 19.01, Canon 19, Id.). And under the Canons of Professional Ethics, a lawyer must steadfastly bear in mind that his great trust is to be performed within and not without the bounds of the law (Canon 15, Id.), that he advances the honor of his profession and the best interest of his client when he renders service or gives advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law (Canon 32, Id.). These canons strip a lawyer of the lawyer-client privilege whenever he conspires with the client in the commission of a crime or a fraud. I then vote to DENY, for want of merit, the instant petition. PUNO, J., dissenting: This is an important petition for certiorari to annul the resolutions of the respondent Sandiganbayan denying petitioners" motion to be excluded from the Complaint for recovery of alleged ill-gotten wealth on the principal ground that as lawyers they cannot be ordered to reveal the identity of their client. First, we fast forward the facts. The Presidential Commission on Good Government (PCGG) filed Civil Case No. 33 before the Sandiganbayan against Eduardo M.Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as co-defendants are the petitioners in the cases at bar -lawyers Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose, Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer Raul Roco, now a duly elected senator of the Republic. All co-defendants were then partners of the law firm, Angara, Abello, Concepcion, Regala and Cruz Law Offices, better known as the ACCRA Law Firm. The Complaint against Cojuangco, Jr., and the petitioners alleged, inter alia, viz: "x x x x x x x x x "The wrongs committed by defendants acting singly or collectively and in unlawful concert with one another, include the misappropriation and theft of public funds, plunder of the nation's wealth, extortion, blackmail, bribery, embezzlement and other acts of corruption, betrayal of public trust and brazen abuse of power as more fully described (in the subsequent paragraphs of the complaint), all at the expense and to the grave and irreparable damage of Plaintiff and the Filipino people. "Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro D. Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul S. Roco of Angara, Concepcion, Cruz, Regala, and Abello law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other in setting up, through the use of the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC and more than twenty other coconut levy funded corporations, including the acquisition of the San Miguel Corporation shares and the institutionalization through presidential directives of the coconut monopoly. Through insidious means and machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks ACCRA Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has approximately 1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as holding approximately 3,744 shares as of 7 June 1984." In their Answer, petitioners alleged that the legal services offered and made available by their firm to its clients include: (a) organizing and acquiring business organizations, (b) acting as incorporators or stockholders thereof, and (c) delivering to clients the corresponding documents of their equity holdings (i.e., certificates of stock endorsed in blank or blank deeds of trust or assignment). They claimed that their activities were "in furtherance of legitimate lawyering." In the course of the proceedings in the Sandiganbayan, the PCGG filed a Motion to Admit Third Amended Complaint and the Third Amended Complaint excluding lawyer Roco as party defendant. Lawyer Roco was excluded on the basis of his promise to reveal the identity of the principals for whom he acted as nominee/stockholder in the companies involved in the case. The Sandiganbayan ordered petitioners to comment on the motion. In their Comment, petitioners demanded that they be extended the same privilege as their co-defendant Roco. They prayed for their exclusion from the complaint, PCGG agreed but set the following conditions: (1) disclosure of the identity of their client; (2) submission of documents substantiating their lawyer-client relationship; and (3) submission of the deeds of assignment petitioners executed in favor of their client covering their respective shareholdings. The same conditions were imposed on lawyer Roco. Petitioners refused to comply with the PCGG conditions contending that the attorney-client privilege gives them the right not to reveal the identity of their client. They also alleged that lawyer Roco was excluded though he did not in fact reveal the identity of his clients. On March 18, 1992, the Sandiganbayan denied the exclusion of petitioners in Case No. 33. It held: "x x x x x x x x x "ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e., their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client. This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified his principal, which revelation could show the lack of cause against him. This in turn has allowed the PCGG to exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72). The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not to make the disclosures required by the PCGG. The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party defendants. In the same vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco. Neither can this Court. WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit." Sandiganbayan later denied petitioners' motion for reconsideration in its resolutions dated May 21, 1988 and September 3, 1992. In this petition for certiorari, petitioners contend: "The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who undisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law agency. "II "The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving of equal treatment. 1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s) for whom he acted as nominee-stockholder. 2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s), the disclosures does not constitute a substantial distinction as would make the classification reasonable under the equal protection clause. 3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco in violation of the equal protection clause, "III "The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case, the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the other information requested by the PCGG. 1. Under the peculiar facts of this case, the attorneyclient privilege includes the identity of the client(s). 2. The factual disclosures required by the PCGG are not limited to the identity of petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters. "IV "The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the constitutional right of petitioners ACCRA lawyers to the equal protection of the law." The petition at bar is atypical of the usual case where the hinge issue involves the applicability of attorney-client privilege. It ought to be noted that petitioners were included as defendants in Civil Case No. 3 3 as conspirators. Together with Mr. Cojuangco, Jr., they are charged with having "x x x conspired and confederated with each other in setting up, through the use of the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CICI and more than twenty other coconut levy funded corporations, including the acquisition of San Miguel Corporation shares and the institutionalization through presidential directives of the coconut monopoly." To stress, petitioners are charged with having conspired in the commission of crimes. The issue of attorney-client privilege arose when PCGG agreed to exclude petitioners from the complaint on condition they reveal the identity of their client. Petitioners refused to comply and assailed the condition on the ground that to reveal the identity of their client will violate the attorney-client privilege. It is thus necessary to resolve whether the Sandiganbayan committed grave abuse of discretion when it rejected petitioners' thesis that to reveal the identity of their client would violate the attorney-client privilege. The attorneyclient privilege is the oldest of the privileges for confidential communications known to the common law. 1 For the first time in this jurisdiction, we are asked to rule whether the attorney-client privilege includes the right not to disclose the identity of client. The issue poses a trilemma for its resolution requires the delicate balancing of three opposing policy considerations. One overriding policy consideration is the need for courts to discover the truth for truth alone is the true touchstone of justice. 2 Equally compelling is the need to protect the adversary system of justice where truth is best extracted by giving a client broad privilege to confide facts to his counsel. 3 Similarly deserving of sedulous concern is the need to keep inviolate the constitutional right against self-incrimination and the right to effective counsel in criminal litigations. To bridle at center the centrifugal forces of these policy considerations, courts have followed the prudential principle that the attorneyclient privilege must not be expansively construed as it is in derogation of the search for truth. 4 Accordingly, a narrow construction has been given to the privilege and it has been consistently held that "these competing societal interests demand that application of the privilege not exceed that which is necessary to effect the policy considerations underlying the privilege, i.e., 'the privilege must be upheld only in those circumstances for which it was created."5 Prescinding from these premises, our initial task is to define in clear strokes the substantive content of the attorney-client privilege within the context of the distinct issues posed by the petition at bar. With due respect, I like to start by stressing the irreducible principle that the attorney-client privilege can never be used as a shield

to commit a crime or a fraud. Communications to an attorney having for their object the commission of a crime "x x x partake the nature of a conspiracy, and it is not only lawful to divulge such communications, but under certain circumstances it might become the duty of the attorney to do so. The interests of public justice require that no such shield from merited exposure shall be interposed to protect a person who takes counsel how he can safely commit a crime. The relation of attorney and client cannot exist for the purpose of counsel in concocting crimes." 6 In the well chosen words of retired Justice Quiason, a lawyer is not a gun for hire. 7 I hasten to add, however, that a mere allegation that a lawyer conspired with his client to commit a crime or a fraud will not defeat the privilege. 8 As early as 1993, no less than the Mr. Justice Cardozo held in Clark v. United States 9 that: "there are early cases apparently to the effect that a mere charge of illegality, not supported by any evidence, will set the confidences free x x x But this conception of the privilege is without support x x x To drive the privilege away, there must be 'something to give colour to the charge'; there must be prima facie evidence that it has foundation in fact." In the petition at bar, however, the PCGG appears to have relented on its original stance as spelled out in its Complaint that petitioners are co-conspirators in crimes and cannot invoke the attorney-client privilege. The PCGG has agreed to exclude petitioners from the Complaint provided they reveal the identity of their client. In fine, PCGG has conceded that petitioners are entitled to invoke the attorney-client privilege if they reveal their client's identity. Assuming then that petitioners can invoke the attorneyclient privilege since the PCGG is no longer proceeding against them as coconspirators, in crimes, we should focus on the more specific issue of whether the attorneyclient privilege includes the right not to divulge the identity of a client as contended by the petitioners, As a general rule, the attorney-client privilege does not include the right of non-disclosure of client identity. The general rule, however, admits of well-etched exceptions which the Sandiganbayan failed to recognize. The general rule and its exceptions are accurately summarized in In re Grand Jury Investigation, 10 viz: "The federal forum is unanimously in accord with the general rule that the identity of a client is, with limited exceptions, not within the protective ambit of the attorney-client privilege. See: In re Grand Jury Proceedings (Pavlick-), 680 F.2d 1026, 1027 (5th Cir. 1982) (en banc); In re Grand Jury Proceedings (Jones), 517 F.2d 666, 670-71 (5th Cir. 1975); In re Grand Jury Proceedings (Fine), 651 F.2d 199, 204 (5th Cir. 198 1); Frank v. Tomlinson, 3 5 1 F. 2d 3 84 (5th Cir. 1965), cert. denied, 382 U.S. 1028, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966); In re Grand Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982); In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979). The Circuits have embraced various "exceptions" to the general rule that the identity of a client is not within the protective ambit of the, attorney-client privilege. All such exceptions appear to be firmly grounded in the Ninth Circuit's seminal decision in Baird v. Koerner, 279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from an attorney stating that an enclosed check in the amount of $ 12,706 was being tendered for additional amounts due from undisclosed taxpayers. When the IRS summoned the attorney to ascertain the identity of the delinquent taxpayers the attorney refused identification asserting the attorney-client privilege. The Ninth Circuit, applying California law, adjudged that the "exception" to the general rule as pronounced in Ex parte McDonough, 170 Cal. 230, 149 P. 566 (1915) controlled: 'The name of the client will be considered privileged matter where the circumstances of the case are such that the name of the client is material only for the purpose of showing an acknowledgment of guilt on the part of such client of the very offenses on account of which the attorney was employed.' Baird,supra, 279 F.2d at 633. The identity of the Baird taxpayer was adjudged within this exception to the general rule. The Ninth circuit has continued to acknowledge this exception. 'A significant exception to this principle of nonconfidentiality holds that such information may be privileged when the person invoking the privilege is able to show that a strong possibility exists that disclosure of the information would implicate the client in the very matter for which legal advice was sought in the first case.' In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th Cir. 1982). Accord: United States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir. 1977); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979); United States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be most succinctly characterized as the "legal advice" exception, has also been recognized by other circuits. See: In re Walsh, 623 F.2d 489, 495, (7th Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531,66 L.Ed.2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir. 1980), cert. denied, 449 U.S. 1083, 101 S. Ct. 869-70, 66 L.Ed.2d 808 (1981). Since the legal advice exception is firmly grounded in the policy of protecting confidential communications, this Court adopts and applies its principles herein. See: In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), supra. It should be observed, however, that the legal advice exception may be defeated through a prima facie showing that the legal representation was secured in furtherance of present or intended continuing illegality, as where the legal representation itself is part of a larger conspiracy. See: In re Grand Jury Subpoenas Decus Tecum (Marger/Merenbach), supra, 695 F.2d at 365 n. 1; In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531, 66 L.Ed. 2d 291 (1980): In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir. 1980); cert. denied, 449 U.S. 1083, 101 S. Ct. 869, 66 L. Ed. 2d 808 (1981); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979) UnitedStates v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). See also: Clark v. United States, 289 U.S. 1, 15, 53, S. Ct. 465, 469, 77 L. Ed. 993 (1933); In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).

Another exception to the general rule that the identity of a client is not privileged arises where disclosure of the identity would be tantamount to disclosing an otherwise protected confidential communication. In Baird, supra, the Ninth Circuit observed: 'If the identification of the client conveys information which ordinarily would be conceded to be part of the usual privileged communication between attorney and client, then the privilege should extend to such identification in the absence of other factors.' Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the following exception: To the general rule is an exception, firmly embedded as the rule itself. The privilege may be recognized where so much of the actual communication has already been disclosed that identification of the client amounts to disclosure of a confidential communication. NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965), Accord: United States v. Tratner, 511 F.2d 248, 252 (7th Cir. 1975); Colton v. United States, 306 F.2d 633, 637 (2d Cir. 1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 1963); Tillotson v. Boughner, 350 F.2d 663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d Cir. 1944). See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed. 474 (1826). The Seventh Circuit has added to the Harvey exception the following emphasized caveat: The privilege may be recognized where so much of the actual communication has already been disclosed [not necessarily by the attorney, but by independent sources as well] that identification of the client [or of fees paid] amounts to disclosure of a confidential communication. United States vs. Jeffers, 532 F.2d 110 1, 1115 (7th Cir. 1976 (emphasis added). The Third Circuit, applying this exception, has emphasized that it is the link between the client and the communication, rather than the link between the client and the possibility of potential criminal prosecution, which serves to bring the clients' identity within the protective ambit of the attorney-client privilege. See: In re Grand Jury Empanelled February 14, 1978 (Markowitz), 603 F.2d 469, 473 n.4 (3d Cir. 1979). Like the "legal advice" exception, this exception is also firmly rooted in principles of confidentiality. Another exception, articulated in the Fifth Circuit's en banc decision of In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026 (5th Cir. 1982 (en banc), is recognized when disclosure of the identity of the client would provide the "last link" of evidence: We have long recognized the general rule that matters involving the payment of fees and the identity of clients are not generally privileged. In re Grand Jury Proceedings, (United States v. Jones), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n. 2. There we also recognized, however, a limited and narrow exception to the general rule, one that obtains when the disclosure of the client's identity by his attorney would have supplied the last link in an existing chain of incriminating evidence likely to lead to the client's indictment."' I join the majority in holding that the Sandiganbayan committed grave abuse of discretion when it misdelineated the metes and bounds of the attorney-client privilege by failing to recognize the exceptions discussed above. Be that as it may, I part ways with the majority when it ruled that petitioners need not prove they fall within the exceptions to the general rule. I respectfully submit that the attorney-client privilege is not a magic mantra whose invocation will ipso facto and ipso jure drape he who invokes it with its protection. Plainly put, it is not enough to assert the privilege. 11 The person claiming the privilege or its exceptions has the obligation to present the underlying facts demonstrating the existence of the privilege. 12 When these facts can be presented only by revealing the very information sought to be protected by the privilege, the procedure is for the lawyer to move for an inspection of the evidence in an in camera hearing. 13 The hearing can even be in camera and ex-parte. Thus, it has been held that "a well-recognized means for an attorney to demonstrate the existence of an exception to the general rule, while simultaneously preserving confidentiality of the identity of his client, is to move the court for an in camera ex-parte hearing. 14 Without the proofs adduced in these in camera hearings, the Court has no factual basis to determine whether petitioners fall within any of the exceptions to the general rule. In the case at bar, it cannot be gainsaid that petitioners have not adduced evidence that they fall within any of the above mentioned exceptions for as aforestated, the Sandiganbayan did not recognize the exceptions, hence, the order compelling them to reveal the identity of their client. In ruling that petitioners need not further establish the factual basis of their claim that they fall within the exceptions to the general rule, the majority held: "The circumstances involving the engagement of lawyers in the case at bench therefore clearly reveal that the instant case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to establish said client's connection with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorney-client relationship). Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the word of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a . . . crime." I respectfully submit that the first and third exceptions relief upon by the majority are not self-executory but need factual basis for their successful invocation. The first exception as cited by the majority is "x x x where a strong probability exists that revealing the clients' name would implicate that client in the very activity for which he sought the lawyer's advice." It seems to me evident that "the very activity for which he sought the lawyer's advice" is a question of fact which must first be established before there can be any ruling that the exception

can be invoked. The majority cites Ex Parte Enzor, 15 and US v. Hodge and Zweig, 16 but these cases leave no doubt that the "very activity" for which the client sought the advice of counsel was properly proved, In both cases, the "very activity" of the clients reveal they sought advice on their criminal activities. Thus, in Enzor, the majority opinion states that the "unidentified client, an election official, informed his attorney in confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end." 17 In Hodge, the "very activity" of the clients deals with illegal importation of drugs. In the case at bar, there is no inkling whatsoever about the "very activity" for which the clients of petitioners sought their professional advice as lawyers. There is nothing in the records that petitioners were consulted on the "criminal activities" of their client. The complaint did allege that petitioners and their client conspired to commit crimes but allegations are not evidence. So it is with the third exception which as related by the majority is "where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime."18 Again, the rhetorical questions that answer themselves are: (1) how can we determine that PCGG has "no case" against petitioners without presentation of evidence? and (2) how can we determine that the name of the client is the only link without presentation of evidence as to the other links? The case of Baird vs. Koerner 19 does not support the "no need for evidence" ruling of the majority. In Baird, as related by the majority itself, "a lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the US Internal Revenue Service (IRS). It appeared that the taxpayers' returns of previous years were probably incorrect and the taxes understated. 20 Once more, it is clear that the Baird court was informed of the activity of the client for which the lawyer was consulted and the activity involved probable violation of tax laws. Thus, the Court held: "The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some one or more years in the past. The names of the clients are useful to the government for but one purpose - to ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several years. The voluntary nature of the payment indicates a belief by the taxpayers that more taxes or interest or penalties are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here involved was employed to advise his clients what, under the circumstances, should be done." In fine, the factual basis for the ruling in Baird was properly established by the parties. In the case at bar, there is no evidence about the subject matter of the consultation made by petitioners' client. Again, the records do not show that the subject matter is criminal in character except for the raw allegations in the Complaint. Yet, this is the unstated predicate of the majority ruling that revealing the identity of the client "x x x would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime." The silent implication is unflattering and unfair to petitioners who are marquee names in the legal profession and unjust to their undisclosed client. Finally, it ought to be obvious that petitioners' right to claim the attorney-client privilege is resolutory of the Complaint against them, and hence should be decided ahead and independently of their claim to equal protection of the law. Pursuant to the rule in legal hermeneutics that courts should not decide constitutional issues unless unavoidable, I also respectfully submit that there is no immediate necessity to resolve petitioners' claim to equal protection of the law at this stage of the proceedings. IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion.

[GRN L-2016 August 23, 1949] Testate estate of RICHARD THOMAS FITZSIMMONS deceased. MARCIAL P. LICHAUCO, administrator and appellee, vs. ATLANTIC, GULF & PACIFIC COMPANY OF MANILA, claimant and appellant. 1. EVIDENCE; SURVIVING-PARTIES RULE; WITNESSES; CORPORATION AS A PARTY; OFFICERS AND/OR STOCKHOLDERS ARE NOT DISQUALIFIED To TESTIFY -- Inasmuch as section 26(c) of Rule 123 of the Rules of Court disqualifies only parties or assignors of parties, the officers and/or stockholders of a corporation are not disqualified from testifying for or against the corporation which is a party to an action upon a claim or demand against the estate of a deceased person as to any matter of fact occurring before the death of such deceased person. 2. ID.; SELF-SERVING DECLARATION AND DECLARATION AGAINST INTEREST, COMPARED AND DISTINGUISHED.-A self-serving declaration is a statement favorable to the interest of the declarant. It is not admissible in evidence as proof of the facts asserted. "The vital objection to the admission of this kind of evidence is its hearsay character. Furthermore such declarations are untrustworthy; to permit their introduction in evidence would open the door to frauds and perjuries." (20 Am. Jur., Evidence, sec. 558, pages 470, 471.) On the other hand, a declaration against the interest of the person making it is admissible in evidence, notwithstanding its hearsay

character, if the declaration is relevant and the declarant has died, become insane, or for some other reason is not available as a witness. "The true test in reference to the reliability of the declaration is not whether it was made ante litem inotam, as is the case with reference to some classes of hearsay evidence, but whether the declaration was uttered under circumstances justifying the conclusion that there was no probable motive to falsify." (Id., section 556, pp. 467, 468.) 3. CORPORATIONS; OFFICERS; SALARIES; DURING PERIOD WHEN CORPORATION IS NOT IN OPERATION AND OFFICERS ARE INCAPACITATED OR DID NOT PERFORM ANY SERVICE.-There exists no principle of law that would authorize the court to compel a corporation, which for a long period was not in operation and did not receive any income, to pay the salaries of its officers during such period, even though they were incapacitated and did not perform any service. To do so would be tantamount to depriving the corporation or its stockholders of their property without due process of law. APPEAL from an order of the Court of First Instance of Manila. Natividad, J. The facts are stated in the opinion of the court. Perkins, Ponce Enrile, Contreras & Gomez and Taada, Pelaez & Teehankee for appellant. Roxas, Picazo & Mejia for appellee. OZAETA, J.: This is an appeal from a judgment of the Court of First Instance of Manila denying appellant's claim of P63,868.67 against the estate of the deceased Richard T. Fitzsimmons, and granting appellee's counterclaim of P90,000 against the appellant. The appellant Atlantic, Gulf & Pacific Company of Manila is a foreign corporation duly registered and licensed to do business in the Philippines, with its office and principal place of business in the City of Manila. Richard T. Fitzsimmons was the president and one of the largest stockholders of said company when the Pacific war broke out on December 8, 1941. As such president he was receiving a salary of P3,000 a month. He held 1,000 shares of stock, of which 545 shares had not been fully paid for, but for which he had executed promissory notes in favor of the company aggregating P245,250, at the rate of P450 a share. In 1941 the sum of P64,500 had been credited in his favor on account of the purchase price of the said 545 shares of stock out of bonuses and dividends to which he was entitled from the company. Under his agreements with the company dated April 4 and July 12, 1939, should he die without having fully paid for the said 545 shares of stock, the company, at its option, may either reacquire the said 545 shares of stock by returning to his estate the amount applied thereon, or issue in favor of his estate the corresponding number of the company's shares of stock equivalent to the amount paid thereon at P450 a share. Soon after the Japanese army occupied Manila in January, 1942, it seized and took possession of the office and all the properties and assets of the appellant corporation and interned all its officials, they being American citizens. Richard T. Fitzsimmons died on June 27, 1944, in the Santo Tomas internment camp, and special proceeding No. 70139 was subsequently instituted in the Court of First Instance of Manila for the settlement of his estate. The Atlantic, Gulf & Pacific Company of Manila resumed business operations in March, 1945. In due course the said company filed a claim against the estate of Richard T. Fitzsimmons which, as amended, consisted of the following items: A. Personal overdraft of Richard T. Fitzsimmons with Atlantic, Gulf & Pacific Company of Manila in current account . P63,000.00 B. Charges from San Francisco agent of the company not included in above figure A as of November 30, 1945 (P1,002), less subsequent credit advice from San Francisco agent (P133.33) . 868.67 Total . P63,868.67 In the same claim the company offered to reacquire the 545 shares sold to the deceased Fitzsimmons upon return to his estate of the amount of P64,500 paid thereon, and asked the court to authorize the setoff of the amount of its claim of P63,868.67 from the amount of P64,500 returnable to the estate. In his answer to the amended claim the administrator denied the alleged indebtedness of the deceased to the claimant, expressed his conformity to the refund of P64,500 by the claimant to the estate and the retransfer by the latter to the former of the 545 shares of stock, and set up a counterclaim of P90,000 for salaries allegedly due the deceased from the claimant corresponding to the years 1942, 1943, and the first half of 1944, at P36,000 per annum. The issues raised by this appeal are: 1. Whether appellant's claims of P63,000 and P868.67 have been established by satisfactory evidence; and 2. Whether the deceased Richard T. Fitzsimmons was entitled to his salary as president of the Atlantic, Gulf & Pacific Company of Manila from January, 1942, to June 27, 1944, when he died in the Santo Tomas internment camp. I. Upon the claim of P63,000 (item A) the evidence for the claimant consisted of the testimony of Santiago Inacay and Modesto Flores, chief accountant and assistant accountant, respectively, of the Atlantic, Gulf & Pacific Company of Manila. (It is admitted that all the prewar books and records of the company were completely destroyed or lost during the war.) Santiago Inacay testified in substance as follows: He was chief of the accounting department of the Atlantic Gulf & Pacific Company from June, 1930, to December, 1941, and from March, 1945, to the present. The officers of the company had the privilege of maintaining personal accounts with the company. The deceased Fitzsimmons maintained such an account, which consisted of cash advances from the company and payments of bills from outside for his account. On the credit side were entered the salaries of the official and the payments made by

him. "The personal account of Mr. Fitzsimmons, in the year 1941, was on the debit balance; that is, he owed money to the company." "Q. How much was the amount of that debit account of Mr. Fitzsimmons, basing on your recollections ?A. In my recollection of the account, personal account of Mr. Fitzsimmons, as of the last statement of account rendered in the year 1941, it was around P63,000." At the end of each month the accounting department rendered to the deceased a statement of his account showing the balance of his account, and at the bottom of that statement the deceased signed his conformity to the correctness of the balance. The last statement of account rendered to the deceased was that corresponding to the month of November, 1941, the office of the company having closed on December 29, 1941. Asked how it was possible for him to remember the status of the personal account of Mr. Fitzsimmons, he replied: "As Mr. Fitzsimmon's was the president and member of the board of directors, I have to remember it, because it is very shameful on my part that when the said officer and other officers of the company come around and ask me about their balance, I could not tell them the amount of their balance, although not in exact figures, at least in round figures." This witness further testified on direct examination as follows: "Q. You said that Mr. Fitzsimmons is one of those officers whose personal account with the Atlantic, Gulf & Pacific Co. used to be on the debit side in the years previous to 1941. Can you ten the Honorable Court what would happen at the end of each year to the personal account, and to the status of the personal account of Mr. Fitzsimmons?-A. At the end of each year, after the declaration of dividends on paid shares, bonuses and directors' fees, the account will balance to a credit balance. In other words, at the start of the following years, the account will be on the credit side. "Q. So that I gather from you, Mr. Inacay, that the personal account of Mr. Fitzsimmons, as well as the other officers of the Atlantic, Gulf & Pacific Co., at the end of each year, and at the beginning of the incoming year, generally, would be in the credit balance; because of the application of dividends on paid shares, bonuses and the directors' fees?-A. Yes, sir." (Page 80, t. s. n.) On cross-examination the witness admitted that he could not recollect the amount of the balance, either debit or credit, of each of the Americans and other employees who maintained a current account with the company; and on redirect examination he explained that he remembered the balance of the account of Mr. Fitzsimmons "because as accountant I should be-I should have knowledge more or less, of the status of the account of the president, the treasurer, and the rest of the directors." Modesto Flores testified in substance as follows: He was assistant accountant of the Atlantic, Gulf & Pacific Company from October 1, 1935, to December, 1941, and from March 8, 1945, to the present. In 1941, Mr. Fitzsimmons, president of the company, had a personal account with the latter consisting of cash advances which he withdrew from the company and of payments for his account of groceries, automobile, salary of his chauffeur, gasoline and oil, and purchases of furniture for his house and other articles for his personal use. On the credit side of his account were entered his monthly salaries, the dividends declared, if any, the bonuses, and the director's fees. Witness was the one who as accountant made the entries in the books of the company. When Mr. Fitzsimmons withdrew funds by way of cash advances from the company, he signed receipts therefor which were delivered to the cashier, who in turn delivered them to him. When creditors of Mr. Fitzsimmons presented bills to the accounting department for payment, those bills were approved by Mr. Fitzsimmons and the company paid them and charged them to his account. All the books, receipts, papers, documents, and accounts referring to the personal account of Mr. Fitzsimmons were lost during the war. Witness remembered that the personal account of Mr. Fitzsimmons on December 29, 1941, was on the debit side, amounting to P63,000 more or less, according to his best recollection. On cross-examination he testified that in the absence of the records he could not state what part of the P63,000 represented cash advances and what part represented payments made by the company to the creditors of Mr. Fitzsimmons. Aside from Santiago Inacay and Modesto Flores, the claimant also called as witnesses Mr. Henry J. Belden and Mr. Samuel Garmezy, vice-president-treasurer and president, respectively, of the claimant company, to testify on the status of the personal account of the deceased Fitzsimmons with the company as of December, 1941; but upon objection of the administrator the trial court refused to admit their testimony on that point on the ground that said witnesses were incompetent under section 26(c) of Rule 123, they being not only large stockholders and members of the board of directors but also vice-president-treasurer and president, respectively, of the claimant company. In view of the ruling of the trial court, counsel for the claimant stated in the record that Mr Belden, if permitted to testify, would testify as follows: That the deceased Fitzsimmons, being president of the Atlantic, Gulf & Pacific Company in the year 1941, had a current account with said company which, upon the outbreak of the war in December, 1941, had a debit balance against him of P63,000, and that said sum or any part thereof had not been paid. At the suggestion of the court counsel asked his witness whether, if permitted, he really would so testify, and the witness answered in the affirmative, whereupon the court said: "Let Attorney Gomez's offer of testimony ratified by the witness Mr. Belden be made of record." With regard to the witness Mr. Garmezy, counsel for the claimant also made the following offer of proof, to wit: That if said witness were allowed to testify, he would testify as follows: "That sometime in November--sometime during the last days of November, or the first days of December, 1941he received a copy of the trial balance sheet, and in that trial balance sheet, among other things, the personal accounts of each and every one of the officers of the Atlantic, Gulf & Pacific Co., including himself, and also the deceased R. T. Fitzsimmons, appear; and that this witness: would also testify to the fact that on that occasion he checked up his own personal record with the entries appearing in the said trial, balance sheet, and he then had

occasion to find out that the account of the deceased Fitzsimmons with the Atlantic, Gulf & Pacific Co. was a debit account in the amount of around sixty-three thousand pesos, while the personal account of Mr. Garmezy, the witness now testifying, showed a credit account in the sum of around sixty-three thousand pesos. This witness will also testify that this account of sixty-three thousand pesos awed by Mr. Fitzsimmons appeared in, that trial balance, which he had occasion to read in the first days of December, 1941, was not paid by Mr. Fitzsimmons until the present date." (Pages 35-36, t. s. n.) That offer of proof war, likewise ratified by the witness Garmezy and made of record by the trial court. The evidence for the administrator against this claim of P63,000 consisted of Exhibit 1 and the testimony of Mr. Marcial P. Lichauco explaining the circumstances under which said document was prepared and signed by the deceased Fitzsimmons. It appears that on December 15, 1942, Richard Thomas Fitzsimmons sued his wife Miguela Malayto for divorce in the Court of First Instance of Manila. On August 9, 1943, after due trial, the court rendered judgment granting plaintiff's petition for divorce and ordering the dissolution of the marriage between the parties. Attorney Lichauco represented the plaintiff in that divorce ease. After the decree of divorce had become final the plaintiff Fitzsimmons, pursuant to the provisions of the divorce law then in force, submitted to the court an inventory of the assets and liabilities of the conjugal partnership, with a proposed adjudication or division of the net assets among the ex-spouses and their children. A carbon copy of said inventory, which was signed by Richard Thomas Fitzsimmons on November 9, 1943, and filed in the Court of First Instance of Manila on the same date in civil case No. 296, was presented by the administrator as Exhibit 1 in this case and admitted by the trial court over the objection of the claimant. The administrator Mr. Lichauco testified herein that as attorney for Mr. Fitzsimmons in the divorce case he prepared the said inventory from the data furnished him by Mr. Fitzsimmons after he had conferred with and explained to the latter why it was necessary to prepare said inventory, telling him that under the divorce law the conjugal properties had to be liquidated; that since he (Fitzsimmons) was married to Miguela Malayto in the year 1939, he had to include in said inventory all the properties acquired by him between the date of his marriage and the date of his divorce, and that all the obligations incurred by him and not yet paid during the same period should be included because they had to be deducted from the assets in order to determine the net value of the conjugal properties; that he made it very clear to Mr. Fitzsimmons that he should not forget the obligations he had because they would diminish the amount his wife was going to receive, and that any obligation not included in the inventory would be borne by him alone after his wife had received her share. According to Exhibit I the gross value of the assets of the conjugal partnership between the deceased Fitzsimmons and his wife Miguela Malayto as of November, 1943, was P174,700, and the total amount of the obligations was P30,082. These obligations consisted of only two items-one of P21,426 in favor of the Peoples Bank and Trust Company and another of P8,656 in favor of the Philippine Bank of Commerce. In other words, no obligation whatsoever in favor of the Atlantic, Gulf & Pacific Company of Manila was listed in said inventory Exhibit 1. And upon that fact the administrator based his opposition to the claim in question. Before weighing the evidence hereinabove set forth to determine whether it is sufficient to prove appellant's claim of P63,000, it is necessary for us to pass upon appellant's first and third assignments of error referring, respectively, to the trial court's rejection of the testimony of the witnesses Belden and Garmezy and its admission of Exhibit 1. The question raised by the first assignment of error is whether or not the officers of a corporation which is a party to an action against an executor or administrator of a deceased person are disqualified from testifying as to any matter of fact occurring before the death of such deceased person, under Rule 123, section 26(c), of the Rules of Court, which provides: "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." This provision was taken from section 383, paragraph 7, of our former Code of Civil Procedure, which in turn was derived from section 1880 of the Code of Civil Procedure of California. In the case of City Savings Bank vs. Enos, 135 Cal., 167; 67 Pac., 52, 55, the Supreme Court of California, interpreting said article 1880, said: " * * The provision applies only to parties or assignors of parties, and Haslam was neither the one nor the other. If he was a stockholder, which it is claimed he was, that fact would make no difference, for interest no longer disqualifies under our law, Civ. Code Proc. sec. 1879. Appellant cites section 14, Civ. Code, to the effect that the word 'person' includes a corporation; and claims that, as the corporation can only speak through its officers, the section must be held to apply to all who are officially related to the corporation. A corporation may be conceded to be a person, but the concession does not help appellant. To hold that the statute disqualifies all persons from testifying who are officers or stockholders of a corporation would be equivalent to materially amending the statute by judicial interpretation. Plainly the law disqualifies only 'parties or assignors of parties,' and does not apply to persons who are merely employed by such parties or assignors of parties." In a later case, Merriman vs. Wickersman, 141 Cal., 567; 75 Pac., 180, 181-182, the same tribunal, in passing upon the competency of a vice-president and principal stockholder of a corporation to testify, reaffirmed its ruling in City Savings Bank vs. Enos, supra, after examining decisions of other state supreme courts in relation to their respective statutes on the same subject. The court said:

"The Burnham & Marsh Company is a corporation. Mr. Marsh, vice-president and one of its principal stockholders, was allowed to testify to matters and facts in issue. It is contended that the evidence was improperly admitted, in violation of section 1880 of the Code of Civil Procedure, which provides that 'the following persons cannot be witnesses: * * * Parties or assignors of parties to an action or proceeding, or persons in whose behalf an action or proceeding is prosecuted, against an executor or administration, upon a claim or demand against the estate of a deceased person, as to any matter of fact occurring before the death of such deceased person.' At common law interest disqualified any person from being a witness. That rule has been modified by statute. In this state interest is no longer a disqualification, and the disquafications are only such as the law imposes. Code Civ. Proc., see. 1879. An examination of the authorities from other states will disclose that their decisions rest upon the wordings of their statutes, but that generally, where interest in the litigation or its outcome has ceased to disqualify, officers and directors of corporations are not considered to be parties within the meaning of the law. In example, the statute of Maryland (Pub. Gen. Laws, art. 35, sec. 2) limits the disability to the 'party' to a cause of action or contract, and it is held that a salesman of a corporation, who is also a director and stockholder, is not a party, within the meaning of the law, so as to be incompetent to testify in an action by the company against the other party, who is insane or dead. Flach vs. Cottschalk Co., 88 Md., 368; 41 Atl., 908; 42 L. R. A., 745; 71 Am. St. Rep., 418. To the contrary, the Michigan law expressly forbids 'any officer or agent of a corporation to testify at all in -relation to matters which, if true, must have been equally within the knowledge of such deceased person. Howell's Ann. St. Mich. see. 7545. The Supreme Court of Michigan, in refusing to extend the rule to agents of partnerships, said: 'It is conceded that this testimony does not come directly within the wording of the statute, but it is said there is the same reason for holding the agent of a partnership disqualified from testifying that there is in holding the agent of a corporation. This is an argument which should be directed to the legislative rather than to the judicial department of government. * * * The inhibition has been put upon agents of corporations, and has not been put upon agents of partnerships. We cannot, by construction, put into the statute what the Legislature has not seen fit to put into it.' Demary vs. Burtenshaws' Estate (Mich.), 91 N. W., 649. In New York the statute provides that against the executor, administrator, etc., 'no party or person interested in the event, or person from, through, or under whom such party or interested person derives his interest or title shall be examined as a witness in his own behalf or interest.' This is followed by the exception that a person shall not be deemed interested by reason of being a stockholder or officer of any banking corporation which is a party to the action or proceeding or interested in the event thereof. Ann. Code Civ. Proc. N. Y., sec. 829. Here it is apparent that the interest of the witness is made a disqualification, and it is of course held that stockholders and officers of corporations other than banking corporations are under disqualification. Keller vs. West Bradley Mfg. Co., 39 Hun, 348. "To like effects is the statute of Illinois, which declares that no party to any civil action, suit or proceeding, or person directly interested in the event thereof, shall be allowed to testify under the given circumstances. Under this statute it is held that stockholders are interested, within the meaning of the section, and are incompetent to testify against the representatives of the deceased party. Albers Commission Co. vs. Sessel, 193 III., 158, 61 N. E., 1075. The law of Missouri disqualifies 'parties to the contract or cause of action,' and it is held that a stockholder, even though an officer of the bank, is not disqualified by reason of his relation to the corporation when he is not actually one of the parties to the making of the contract in the interest of the bank. "Our own statute, it will be observed, is broader than any of these. It neither disqualifies parties to a contract nor persons in interest, but only parties to the action (Code Civil Procedure, sections 1879, 1880); and thus it is that in City Savings Bank vs. Enos, 135 Cal., 167, 67 Pac., 52, it has been held that one who is cashier and at the same time a stockholder of a bank was not disqualified, it being said: 'To hold that the statute disqualifies all persons from testifying who are officers or stockholders of a corporation would be equivalent to materially amending the statute by judicial interpretation.' It is concluded, therefore, that our statute does not exclude from testifying a stockholder of a corporation, whether he be but a stockholder, or whether, in addition thereto, he be a director or officer thereof." The same view is sustained in Fletcher Cyclopedia Corporations, Vol. 9, pages 535-538; in Jones on Evidence, 1938 Ed. Vol. 3, page 1448; and in Moran on the Law of Evidence in the Philippines, 1939 Ed. pages 141-142. The appellee admits in his brief that in those states where the "dead man's statute" disqualifies only parties to an action, officers and stockholders of a corporation have been allowed to testify in favor of the corporation, while in those states where "parties and persons interested in the outcome of the litigation" are disqualified under the statute, officers and stockholders of the corporation have been held to be incompetent to testify against the estate of a deceased person. The weight of authority sustains appellant's first assignment of error. Inasmuch as section 26(c) of Rule 123 disqualifies only parties or assignors of parties, we are constrained to hold that the officers and/or stockholders of a corporation are not disqualified from testifying, for or against the corporation which is a party to an action upon a claim or demand against the estate of a deceased person, as to any matter of fact occurring before the death of such deceased person. It results that the trial court erred in not admitting the testimony of Messrs. Belden and Garmezy. It is not necessary, however, to remand the case for the purpose of taking the testimony of said witnesses because it would be merely corroborative, if at all, and in any event what said witnesses would have testified, if permitted, already appears in the record as hereinabove set forth, and we can consider it together with the testimony of the chief accountant and the assistant accountant who, according to the appellant itself, were "the only ones in the best of position to testify on the status of the personal account" of the deceased Fitzsimmons.

The third assignment of error raises the question of the admissibility of Exhibit 1. Appellant contends that it is a self-serving declaration, while appellee cop-tends that it is a declaration against interest. A self-serving declaration is a statement favorable to the interest of the declarant. It is not admissible in evidence as proof of the facts asserted. "The vital objection to the admission of this kind of evidence is its hearsay character. Furthermore such declarations are untrustworthy; to permit their introduction in evidence would open the door to frauds and perjuries." (20 Am. Jur., Evidence, see. 558, pages 470-471.) On the other hand, a declaration against the interest of the person making it is admissible in evidence, notwithstanding its hearsay character, if the declaration is relevant and the declarant has died, become insane, or for some other reason is not available as a witness. "The true test in reference to the reliability of the declaration is not whether it was made ante litem motam, as is the case with reference to some classes of hearsay evidence, but whether the declaration was uttered under circumstances justifying the conclusion that there was no probable motive to falsify." (Id., section 556, pp. 467-468.) Insofar, at least, as the appellant was concerned, there was no probable motive on the part of Fitzsimmons to falsify his inventory Exhibit 1 by not including therein appellant's present claim of 1163,000 among his obligations or liabilities to be deducted from the assets of the conjugal partnership between him and his divorced wife. He did not know then that he would die within one year and that the corporation of which he was the president and one of the largest stockholders would present the claim in question against his estate. Neither did he know that the books and records of that corporation would be destroyed or lost. Yet, although he listed in said inventory his obligations in favor of the Peoples Bank and Trust Company and the Philippine Bank of Commerce aggregating more than P30,000, he did not mention at all any obligation in favor of the corporation of which he was the president and one of the largest stockholders. Assuming that he owed his corporation P63,000 for which he signed receipts and vouchers and which appeared in the books of said corporation, there was no probable motive for him not to include such obligation in the inventory Exhibit 1. It would have been to his interest to include it so that his estranged and divorced wife might share in its payment. The net assets appearing in Exhibit 1 amounted to P144,618, one-half of which was adjudicated to the children and the other half was divided between the spouses, so that each of the latter received only P36,154.50. By not including the obligation of P63,000 claimed by the appellant (assuming that he owed it), Fitzsimmons' adjudicated share in the liquidation of the conjugal partnership would be short by nearly P27,000 to meet said claim, whereas by including said obligation he would have received a net share of more than P10,000 free from any liability. We find, therefore, that Exhibit 1, insofar as the omission therefrom of the claim in question was concerned, far from being self-serving to, was a declaration against the interest of, the declarant Fitzsimmons. He having since died and therefore no longer available as a witness, said document was correctly admitted by the trial court in evidence. We shall now pass upon appellant's second assignment of error, which raises the question of whether or not appellant's claim has been satisfactorily proven. We shall consider the claim of P63,000 separately from the item of P868.67. We have no reason whatsoever to doubt the good faith of Messrs. Samuel Garmezy and Henry J. Belden, president and vicepresident-treasurer, respectively, of the claimant corporation, in presenting the claim of P63,000 against the estate of Fitzsimmons, nor the good faith of the administrator Mr. Marcial. P. Lichauco in opposing said claim. They are all men of recognized integrity and of good standing in society. The officers of the claimant corporation have shown commendable fairness in their dealings with the estate of Fitzsimmons. They voluntarily informed the administrator that Fitzsimmons had paid P64,500 on account of the purchase price of 545 shares of stock of the company, and not P45,000 only, as the administrator believed. Likewise, they voluntarily informed him in connection with his claim for Fitzsimmons' back salaries that Fitzsimmons' annual salary was P36,000 and not P30,000, as the administrator believed. We can therefore readily assume that Messrs. Garmezy and Belden believed in good faith that the books of the corporation showed a debit balance of around P63,000 as of the outbreak of the Pacific war on December 8, 1941. On the other hand, if Mr. Fitzsimmons, who was the president and one of the largest stockholders of the claimant corporation, really owed the latter around P63,000 on December 8, 1941, and had not paid it before he liquidated his conjugal partnership in November, 1943, as a consequence of the decree of divorce he obtained against his wife, we see no reason why he did not include such obligation in said liquidation. Judging from the high opinion which the officers and stockholders of the corporation entertained of Fitzsimmons as shown by their resolution hereinafter quoted, they cannot impute bad faith to. him in not acknowledging the claim in question. There is a possible explanation of this seemingly irreconcilable conflict, which in the absence of other proofs we consider satisfactory but which both parties seem to have overlooked. We find it in the testimony on direct examination of appellant's witness Santiago Inacay, page 80 of the transcript, hereinabove quoted. According to Inacay, at the end of each year, after the declaration of dividends, bonuses, and director's fees, the account of Fitzsimmons was brought up to a credit balance. "In other words," he said, "at the start of the following year the account will be on the credit side." Not satisfied with that categorical statement, counsel for the appellant asked his own witness the following question and the witness gave the following answer: "Q. So that I gather from you, Mr. Inacay, that the personal account of Mr. Fitzsimmons, as well as the other officers of the Atlantic Gulf & Pacific Co., at the end of each year, and at the beginning of the incoming year, generally, would be in the credit balance; because of the application of dividends on paid shares, bonuses, and director's fees?-A. Yes, sir.

"Q. In the year, 1941, therefore, no declaration of dividends for the last six months-there were no declarations of director's fees * * * I withdraw the question, and that is all." It is to be regretted that neither counsel for the appellant nor counsel for the appellee pursued the examination of the witness to determine, if possible, the approximate amount of the dividends, bonuses, and director's fees that would have been credited to Fitzsimmons as of the end of the year 1941. But enough appears in his testimony to warrant the deduction that had the war not forced the corporation to close office on December 29, 1941, dividends, bonuses, and director's fees for the year 1941 would, as of the end of that year, have been declared and credited to the account of Fitzsimmons, which as in previous years would or might have brought that account on the credit side. President Garmezy reported to the meeting of the stockholders that the volume of work performed by the company in 1941 "exceeded that of 1940." (Exhibit 2.) We cannot assume that the company earned less profits in 1941 than in 1940. Probably the reason why Fitzsimmons did not include or mention any obligation in favor of his own corporation in his inventory Exhibit I was that he believed he was entitled to be credited by said corporation with dividends, bonuses, and director's fees corresponding to the year 1941, which as in previous years would bring his account on the credit side. If that was the case, the company was technically correct in asserting that at the outbreak of the Pacific war in December, 1941, its books showed a debit balance against Fitzsimmonsno dividends, bonuses, and director's fees having been actually declared and credited to Fitzsimmons at that time. But we think Fitzsimmons was justified in considering his account as having to all intents and purposes been brought on the credit side; because if such dividends, bonuses, and director's fees had been earned, the fact that they were not actually declared and credited to him, should not prejudice him. The subsequent loss of the company's properties and assets as a result of the war should be borne by the company and not by its officers. Leaving the foregoing reflections aside, we are confronted only, on the one hand, by the oral testimony of the witnesses for the claimant based entirely on their memory as to the status of Fitzsimmons' account, and on the other by Exhibit 1, which contradicts said testimony. Realizing the frailty and unreliability of human memory, especially with regard to figures, after the lapse of more than five years, we find no sufficient basis upon which to reverse the trial court's finding that this claim had not been satisfactorily proven. With reference to the item of P868.67, we find it to have been sufficiently proven by the testimony of Santiago Inacay and Modesto Flores, supported by the documents Exhibits A, B, C, and D, which establish the fact that in November and December, 1941, the San Francisco agent of the company deposited in the Crocker First National Bank of San Francisco the total sum of $500 to the account of Fitzsimmons, which said agent debited against the company. Debit notices of the deposits were not received by the company until after the liberation. The administrator admitted in his testimony that after the death of Fitzsimmons he received from the Crocker First National Bank of San Francisco the balance of Mr. Fitzsimmons' account in the sum of P1,788.75. Aside from that debit of P1,000 against the company for the account of Fitzsimmons, the agent also paid $1 or P2 for Fitzsimmons' subscription to the San Francisco Chronicle, making a total of P1,002. From this was deducted a credit of P133.33, consisting of a payment made on June 30, 1946, by a creditor of Fitzsimmons named J. H. Chew, as testified to by Mr. Flores and supported by Exhibit E, leaving a balance of P868.67. The trial court therefore erred in not allowing said claim. II. We shall now pass upon appellant's fourth assignment of error, which assails the trial court's granting of appellee's counterclaim of P90,000 for salaries allegedly due to the deceased Fitzsimmons as president of the appellant corporation for the years 1942, 1943, and the first six months of 1944. The undisputed facts are: Fitzsimmons was the president of the appellant corporation in 1941 with a salary of P36,000 a year. The corporation was forced to suspend its business operations from December 29, 1941, to March 8, 1945, on account of the war, its office and all its properties having been seized by the Japanese invader. Fitzsimmons, together with the other officers of the corporation, was interned by the enemy in the Santo Tomas internment camp, where he died on June 27, 1944. At the annual meeting of the stockholders of the corporation held on January 21, 1946, the president, S. Garmezy, reported among other things as follows: "While interned, the Company borrowed money on notes signed by Mr. Fitzsimmons and Mr. Garmezy; money was also received for the same purpose without signing of notes. Mr. Kihlstedt, who before the war was Superintendent of the Philippine Iron Mines, helped a great deal in obtaining this money, bringing it to Camp and distributing it to families living outside the Camp. Mr. Kihlstedt being a Swedish citizen, was able to live outside and he did some very good work." And in that meeting the following resolutions, among others, were approved: "RESOLVED, that all acts in 1941 through 1945 of the Directors in office since their election in 1941 and elected in the interim, as duly recorded in the minutes of the meetings of the Board, are hereby approved, ratified and confirmed, and are to be accepted as acts of this corporation." "RESOLVED, that in the death of R. T. Fitzsimmons, President of the Company from March, 1939, to the time of his death, which occurred in the Santo Tomas Internment Camp, Manila, on June 27, 1944, the Company suffered a distinct loss and his country a loyal American; "FURTHER, that his passing is keenly felt and mourned by those of the Company with whom he was associated for more than thirty years, not only because of his value to the Company as an executive but also for the kindness, consideration and tolerance he showed to all at all times;

"BE IT FURTHER RESOLVED, that the Company convey its sympathies to the family and other immediate relatives of the late Mr. Fitzsimmons, transmitting to them a copy of this resolution." Based upon those facts, the trial court granted the "back pay" claimed by the appellee. There was no resolution either of the stockholders or of the board of directors of the company authorizing the payment of the salaries of the president or any other officer or employee of the corporation for the period of the war when the corporation was forced completely to suspend its business operations and when its officers were interned or virtually held prisoners by the enemy. The theory of the appellee, which was sustained by the trial court, is that as long as a corporate officer with a fixed salary retains the office he is entitled to that salary notwithstanding his inability to perform his duties. The main case cited by the appellee in support of his theory is Brown vs. Galveston Wharf Co., 50 S. W., 126, 128; 92 Tex., 520. In that ease the president of the defendant corporation claimed his salary for a period of almost eleven months, during which he was on an indefinite leave of absence, and the court allowed it, holding that "so long as he remained the president of the company, the salary was an incident to the office, and ran with it for the whole time, although he may have failed to perform the duties of president for any given part of such time." If such a sweeping pronouncement is to be applied regardless of whether or not the corporation was in operation during the period covered by the claim for the salary, as seems to be contended by the appellee, we must say that we cannot subscribe to it. We know of no principle of law that would authorize the court to compel a corporation, which for a long period was not in operation and did not receive any income, to pay the salaries of its officers during such period, even though they were incapacitated and did not perform any service. To do so would be tantamount to depriving the corporation or its stockholders of their property without due process of law. The resolutions of the stockholders hereinabove quoted are invoked by the appellee to support the proposition that Fitzsimmons, during his internment, performed certain acts as president of the corporation, which were ratified and confirmed by the stockholders in their annual meeting on January 21, 1946. But those acts consisted merely of borrowing money for himself and the other officers of the corporation and their respective families to enable them to eke out an existence during their internment. The ratification of those acts by the stockholders had for its purpose to relieve Fitzimmons of personal liability for the obligations thus contracted by him in the name of the company. To say that by thus ratifying those acts of Fitzsimmons the corporation became obligated to pay his salaries during his internment aggregating P90,000, would be the height of absurdity. We are clearly of the opinion that the estate of Fitzsimmons is not entitled to its counterclaim of P90,000 or any part thereof. Let judgment be entered modifying that of the trial court to read as follows: "The appellant Atlantic, Gulf & Pacific Company of Manila is ordered to pay to the administrator the sum of P64,500 upon the retransfer by the latter to the former of the 545 shares of stock purchased by the decedent in 1939. "The administrator is ordered 'to pay the company the sum of P868.67. "The claim of the company against the estate for P63,000 and the counterclaim of the estate against the company for P90,000 are disapproved." It is so ordered, without costs. Moran, C. J., Paras, Feria, Bengzon, Padilla, Tuason, Montemayor, and Reyes, JJ., concur. Judgment modified.

SECOND DIVISION [GRN L-27434 September 23, 1986.*] GENARO GOI, RUFINA P. VDA. DE VILLANUEVA, VIOLA P. VILLANUEVA, OSCAR P. VILLANUEVA, MARINA P. VILLANUEVA, VERNA P. VILLANUEVA, PRAXEDES P. VILLANUEVA, JR., JOSE P. VILLANUEVA, SAMUEL P. VILLANUEVA, LOURDES P. VILLANUEVA, MILAGROS P. VILLANUEVA DE ARRIETA, petitioners-appellants, vs. THE COURT OF APPEALS and GASPAR VICENTE, respondents-appellees. Ambrosio Padilla Law Office for petitioners-appellants. San Juan, Africa, Gonzales & San Agustin Law Office for respondents-appellees. DECISION FERNAN, J : This is an appeal by certiorari from the decision of the then Court of Appeals in CA-G.R. No. 27800-R entitled, "Gaspar Vicente, Plaintiff-Appellant, vs. Genaro Goi, et. al., Defendants-Appellants" as well as from the resolution denying petitioners' motion for reconsideration. The factual backdrop is as follows: The three (3) haciendas known as San Sebastian, Sarria and Dulce Nombre de Maria situated in the Municipality of Bais, Negros Oriental, were originally owned by the Compaia General de Tabacos de Filipinas [TABACALERA]. Sometime in 1949, the late Praxedes T. Villanueva, predecessor-in-interest of petitioners, negotiated with TABACALERA for the purchase of said haciendas. However, as he did not have sufficient funds to pay the price, Villanueva with the consent of TABACALERA, offered to sell Hacienda Sarria to one Santiago Villegas, who was later substituted by Joaquin Villegas. Allegedly because TABACALERA did not agree to the transaction between

Villanueva and Villegas, without a guaranty private respondent Gaspar Vicente stood as guarantor for Villegas in favor of TABACALERA. The guarantee was embodied in a document denominated as "Escritura de Traspaso de Cuenta." 1 Either because the amount realized from the transaction between Villanueva and Villegas still fell short of the purchase price of the three haciendas, or in consideration of the guaranty undertaken by private respondent Vicente, Villanueva contracted or promised to sell to the latter fields nos. 3, 4 and 13 of Hacienda Dulce Nombre de Maria for the sum of P13,807.00. This agreement was reduced to writing and signed by petitioner Genaro Goi as attorney-in-fact of Villanueva, thus: "En consideracion a la garantia que Don Gaspar Vicente asume con la Cia. Gral. de Tabacos de Filipinas por el saldo de Don Santiago Villegas de P43,539.75 asumido por Don Joaquin Villegas el que Suscribe Praxedes T. Villanueva se compromete ceder es venta a Don Gaspar Vicente los campos nos. 3, 4 y 13 del plano de porcelario de la Hacienda Dulce Nombre de Maria, en compra projectada de la Cia. Gral. de Tabacos de Filipinas. Estas campos representan 6-90-35 hectares por valor de P13,807.00 que Don Gasper Vicente pagara directamente a Praxedes T. Villanueva. "Bais, Central, Octubre 24, 1949. "Fdo. Praxedes T. Villanueva. Por: "Fdo. Genaro Goi Apoderado" 2 Private respondent Vicente thereafter advised TABACALERA to debit from his account the amount of P13,807.00 as payment for the balance of the purchase price. However, as only the amount of P12,460.24 was actually needed to complete the purchase price, only the latter amount was debited from private respondent's account. The difference was supposedly paid by private respondent to Villanueva, but as no receipt evidencing such payment was presented in court, this fact was disputed by petitioners. It is alleged by petitioners that subsequent to the execution of the contract/promise to sell, Villanueva was able to raise funds by selling a property in Ayungon, Negros Oriental. He thus went to private respondent Vicente for the purpose of rescinding the contract/promise to sell. However, as the amount of P12,460.24 had already been debited from private respondent's account, it was agreed that lots 4 and 13 of the Hacienda Dulce Nombre de Maria would merely be leased to private respondent Vicente for a period of five (5) years starting with crop-year 1950-51 at an annual rental of 15% of the gross income, said rent to be deducted from the money advanced by private respondent and any balance owing to Villanueva would be delivered by Vicente together with the lots at the end of the stipulated period of lease. On December 10, 1949, TABACALERA executed a formal deed of sale covering the three haciendas in favor of Villanueva. Fields Nos. 3, 4 and 13 of the Hacienda Dulce Nombre de Maria were thereafter registered in the name of Villanueva under TCT No. T-4780 of the Register of Deeds of Negros Oriental. The fields were likewise mortgaged by Villanueva to the Rehabilitation Finance Corporation (RFC), later transferred to the Philippine National Bank on December 16, 1955, for a total indebtedness of P334,400.00. 3 Meanwhile, Fields nos. 4 and 13 were delivered to private respondent Vicente after the 1949-1950 milling season in January and February, 1950. On June 17, 1950, Villanueva executed a "Documento de la Venta Definitiva" in favor of Joaquin Villegas, covering Lot No. 314 of the Cadastral Survey of Bais with an area of 468,627 square meters, more or less, (Hacienda Sarria). A supplemental instrument was later executed by Villanueva in favor of Villegas to include in the sale of June 17, 1950 the sugar quota of the land. On November 12, 1951, Villanueva died. Intestate proceedings were instituted on November 24, 1951 before the then Court of First Instance of Negros Oriental, docketed as Special Case No. 777. Among the properties included in the inventory submitted to the court were fields nos. 3, 4 and 13 of Hacienda Dulce Nombre de Maria. Field no. 13 with an area of 1 hectare, 44 ares and 95 centares was listed as Lot no. 723 of the inventory, while fields nos. 3 and 4, with areas of 3 hectares, 75 ares and 60 centares, and 1 hectare, 69 ares and 80 centares, respectively, were included in Lot no. 257 of the inventory. On October 7, 1954, the day before the intestate proceedings were ordered closed and the estate of the late Praxedes Villanueva delivered to his heirs, private respondent Vicente instituted an action for recovery of property and damages before the then Court of First Instance of Negros Oriental against petitioner Goi in his capacity as administrator of the intestate estate of Praxedes Villanueva. In his complaint docketed as Civil Case No. 2990, private respondent Vicente sought to recover field no. 3 of the Hacienda Dulce Nombre de Maria, basing his entitlement thereto on the contract/promise to sell executed by the late Praxedes Villanueva in his favor on October 24, 1949. He likewise prayed by way of attorney's fees and other costs the sum of P2,000.00 and for such other further relief which the court may deem just and equitable in the premises. 4 On October 25, 1954, petitioner Goi, as defendant in Civil Case No. 2990, filed an answer with counterclaim for accounting of the produce of fields nos. 4 and 13, as well as the surrender thereof on June 20, 1955, the end of the fifth crop-year, plus moral damages in the sum of P30,000.00 and P3,000.00 as attorney's fees. After an answer to the counter-claim had been filed, private respondent Vicente amended his complaint on September 1, 1955, to include a prayer for damages representing the produce of field no. 3 from 1949-50 until delivery thereof to him. An answer with counterclaim to the amended complaint was duly filed, and on April 25, 1956, private respondent Vicente amended his complaint anew to include as parties-defendants the heirs of the late Praxedes Villanueva.

On July 13, 1957, the parties entered into a stipulation of facts, agreeing, among others, on the costs of production and produce of the three fields in question. The case thereafter proceeded to trial. Plaintiff presented two (2) witnesses: then party-plaintiff Gaspar Vicente, himself, who over the objection of therein defendants testified on facts occurring before the death of Praxedes Villanueva, and Epifanio Equio, a clerk of TABACALERA Agency in the Bais Sugar Central. Defendants presented Genaro Goi, who testified on the alleged verbal lease agreement. On December 18, 1959, the trial court rendered a decision ordering therein defendants-heirs to deliver to Gaspar Vicente field no 3, to execute a formal deed of sale covering fields nos. 3, 4 and 13 in favor of Vicente, to pay the latter actual or compensatory damages in the amount of P81,204.48, representing 15% of the total gross income of field no. 3 for crop-years 1950-51 to 1958-59, and such other amounts as may be due from said field for the crop years subsequent to crop-year 1958-59, until the field is delivered to Vicente, and to pay the sum of P2,000.00 as attorney's fees plus costs. Therein defendant Goi was relieved of any civil liability for damages, either personally or as administrator of the estate. 5 Both parties appealed the decision to the then Court of Appeals; the plaintiff from the portion awarding damages on a claim that he was entitled to more, and defendants, from the entire decision. On December 15, 1966, the Court of Appeals promulgated its decision, affirming that of the lower court, with the modification that the amount of damages to be paid by defendant-heirs to the plaintiff should be the total net income from field no. 3 from the crop year 1950-51 until said field is finally delivered to the plaintiff plus interest thereon at the legal rate per annum. 6 Petitioners filed a motion for reconsideration, but were denied the relief sought in a resolution dated February 9, 1967. Hence, the present appeal by certiorari whereby petitioners raise the following questions of law: "MAY RESPONDENT GASPAR VICENTE TESTIFY ON MATTERS OF FACT OCCURRING BEFORE THE DEATH OF PRAXEDES T. VILLANUEVA, WHICH CONSTITUTES A CLAIM OR DEMAND UPON HIS ESTATE, IN VIOLATION OF RULE 123, SEC. 26, PAR. (C), NOW RULE 130, SEC. 20 PAR. (A)? "MAY NOT A WRITTEN PROMISE TO SELL DATED OCTOBER 24, 1949 BE NOVATED INTO A VERBAL AGREEMENT OF LEASE DURING THE LIFETIME OF THE PROMISSOR, WHOSE DEATH OCCURRED ON NOVEMBER 12, 1951, BY FACTS AND CIRCUMSTANCES SUBSTANTIATED BY COMPETENT ORAL EVIDENCE IN THIS CASE? "SHOULD THE PROMISEE IN A PROMISE TO SELL, WHO PAID P12,460.24 WHICH WAS TO BE ACCOUNTED AND TO BE CREDITED AS RENTALS AFTER FIVE (5) YEARS OF LEASE, WHO IN HIS ORIGINAL COMPLAINT DID NOT ALLEGE NOR PROVE DAMAGES, EXCEPT THE SUM OF P2,000.00 AS ATTORNEY'S FEES, RECEIVE A JUDGMENT FOR DAMAGES IN THE AMOUNT OF P74,056.35 WHICH CONSISTS OF P37,121.26 PLUS LEGAL INTEREST FOR THE CROP YEARS 1950-51 TO 1958-59 AND FOR P3,624.18 TO P4,374.78 FOR EVERY CROP YEAR SUBSEQUENT TO 1958-59 PLUS INTEREST?" 7 We find that neither the trial nor appellate court erred in ruling for the admissibility in evidence of private respondent Vicente's testimony. Under ordinary circumstances, private respondent Vicente 8 would be disqualified by reason of interest from testifying as to any matter of fact occurring before the death of Praxedes T. Villanueva, such disqualification being anchored on Section 20(a) of Rule 130, commonly known as the Survivorship Disqualification Rule or Dead Man Statute, which provides as follows: "Section 20. Disqualification by reason of interest or relationship. - The following persons cannot testify as to matters in which they are interested, directly or indirectly, as herein enumerated: "(a) 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." The object and purpose of the rule is to guard against the temptation to give false testimony in regard to the transaction in question on the part of the surviving party and further to put the two parties to a suit upon terms of equality in regard to the opportunity of giving testimony. 9 It is designed to close the lips of the party plaintiff when death has closed the lips of the party defendant, in order to remove from the surviving party the temptation to falsehood and the possibility of fictitious claims against the deceased. 10 The case at bar, although instituted against the heirs of Praxedes Villanueva after the estate of the latter had been distributed to them, remains within the ambit of the protection, The reason is that the defendants-heirs are properly the "representatives" of the deceased, not only because they succeeded to the decedent's right by descent or operation of law, but more importantly because they are so placed in litigation that they are called on to defend which they have obtained from the deceased and make the defense which the deceased might have made if living, or to establish a claim which deceased might have been interested to establish, if living. 11 Such protection, however, was effectively waived when counsel for petitioners cross-examined private respondent Vicente. "A waiver occurs when plaintiff's deposition is taken by the representative of the estate or when counsel for the representative cross-examined the plaintiff as to matters occurring during deceased's lifetime." 12 It must further be observed that petitioners presented a counterclaim against private respondent Vicente. When Vicente thus took the witness stand, it was in a dual capacity as plaintiff in the action for recovery of property and as defendant in the counterclaim for accounting and surrender of fields nos. 4 and 13. Evidently, as defendant in the counterclaim, he was not disqualified from testifying as to matters of fact occurring before the death of Praxedes Villanueva, said action not having been brought against, but by the estate or representatives of the estate/deceased person.

Likewise, under a great majority of statutes, the adverse party is competent to testify to transactions or communications with the deceased or incompetent person which were made with an agent of such person in cases in which the agent is still alive and competent to testify. But the testimony of the adverse party must be confined to those transactions or communications which were had with the agent. 13 The contract/promise to sell under consideration was signed by petitioner Goi as attorney-in-fact (apoderado) of Praxedes Villanueva. He was privy to the circumstances surrounding the execution of such contract and therefore could either confirm or deny any allegations made by private respondent Vicente with respect to said contract. The inequality or injustice sought to be avoided by Section 20(a) of Rule 130, where one of the parties no longer has the opportunity to either confirm or rebut the testimony of the other because death has permanently sealed the former's lips, does not actually exist in the case a bar, for the reason that petitioner Goi could and did not negate the binding effect of the contract/promise to sell. Thus, while admitting the existence of the said contract/promise to sell, petitioner Goi testified that the same was subsequently novated into a verbal contract of lease over fields nos. 4 and 13 of the Hacienda Dulce Nombre de Maria. Novation takes place when the object or principal condition of an obligation is changed or altered. 14 In order, however, that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other. 15 "Novation is never presumed. It must be established that the old and the new contracts are incompatible in all points, or that the will to novate appear by express agreement of the parties or in acts of equivalent import." 16 The novation of the written contract/promise to sell into a verbal agreement of lease was clearly and convincingly proven not only by the testimony of petitioner Goi, but likewise by the acts and conduct of the parties subsequent to the execution of the contract/promise to sell. Thus, after the milling season of crop year 1949-50, only fields nos. 4 and 13 were delivered to private respondent Vicente. Fields nos. 3, 4 and 13 were subsequently registered in Villanueva's name and mortgaged with the RFC. Villanueva likewise executed a deed of sale covering Hacienda Sarria in favor of Joaquin Villegas. All these were known to private respondent Vicente, yet he did not take any steps toward asserting and/or protecting his claim over fields nos. 3, 4 and 13 either by demanding during the lifetime of Villanueva that the latter execute a similar document in his favor, or causing notice of his adverse claim to be annotated on the certificate of title of said lots. If it were true that he made demands on Villanueva fo the surrender of field no. 3 as well as the execution of the corresponding deed of sale, he should have, upon refusal of the latter to do so, immediately or within a reasonable time thereafter, instituted an action for recovery, or as previously observed, caused his adverse claim to be annotated on the certificate of title. Considering that field no. 3, containing an area of three (3) hectares, 75 ares and 60 centares, is the biggest among the three lots, an ordinary prudent man would have taken these steps if he honestly believed he had any right thereto. Yet, private respondent Vicente did neither, In fact such inaction persisted even during the pendency of the intestate proceedings wherein he could have readily intervened to seek exclusion of fields nos. 3, 4 and 13 from the inventory of properties of the late Praxedes Villanueva. The reason given by private respondent Vicente that field no. 3 was not delivered to him together with fields nos. 4 and 13 because there were small sugar cane growing on said field at that time belonging to TABACALERA, might be taken as a plausible explanation why he could not take immediate possession of lot no. 3, but it certainly could not explain why it took him four years before instituting an action in court, and very conveniently, as petitioners noted, after Villanueva had died and at the time when the verbal contract of lease was about to expire. Both the trial and appellate courts chose to believe in the contract/promise to sell rather than the lease agreement, simply because the former had been reduced to writing, while the latter was merely verbal. It must be observed, though, that the contract/promise to sell was signed by petitioner Goi as attorney-in-fact of the late Praxedes Villanueva, an indication, to our mind, that final arrangements were made by petitioner Goi in the absence of Villanueva. It was therefore natural for private respondent Vicente to have demanded that the agreement be in writing to erase any doubt of its binding effect upon Villanueva. On the other hand, the verbal lease agreement was negotiated by and between Villanueva and private respondent Vicente themselves. Being close friends and relatives 17 it can be safely assumed that they did not find it necessary to reduce the same into writing. In rejecting petitioners' contention respecting the verbal lease agreement, the appellate court put much weight on the failure of petitioners to demand an accounting of the produce of fields nos. 4 and 13 from 1950 to 1954, when the action for recovery of property was filed. Such failure was satisfactorily explained by petitioners in their motion for reconsideration filed before the then Court of Appeals, in this manner: ". . . Mr. Genaro Goi is also a farmer by profession and that there was no need for him to demand a yearly accounting of the total production because the verbal lease agreement was for a term of 5 years. The defendant Mr. Genaro Goi as a sugar planter has already full knowledge as to the annual income of said lots nos. 4 and 13, and since there was the amount of P12,460.25 to be liquidated, said defendant never deemed it wise to demand such a yearly accounting. It was only after or before the expiration of the 5 year lease that said defendant demanded the accounting from the herein plaintiff regarding the production of the 2 lots that were then leased to him. "It is the custom among the sugar planters in this locality that the Lessee usually demands an advance amount to cover the rental for the period of the lease, and the demand of an accounting will be only made after the expiration of the lease period. It was adduced during the trial that the amount of P12,460.75 was considered as

an advance rental of the 2 lots which was leased to the Plaintiff, lots nos. 4 and 13, so we humbly believe that there was no necessity on the part of defendant Mr. Genaro Grio to make a yearly demand for an accounting for the total production of 2 parcels leased to the plaintiff." 18 Petitioners, having clearly and sufficiently shown that the contract/promise to sell was subsequently novated into a verbal lease agreement, it follows that they are entitled to a favorable decision on their counterclaim. Discussion of the third issue raised therefore becomes unnecessary. WHEREFORE, the decision appealed from is hereby reversed. The judicial administrator of the estate of private respondent Gaspar Vicente and or his successors-in-interest are hereby ordered to: a) surrender possession of fields nos. 4 and 13 of the Hacienda Dulce Nombre de Maria to petitioners; b) render an accounting of the produce of said fields for the period beginning crop-year 1950-51 until complete possession thereof shall have been delivered to petitioners; and c) to pay the corresponding annual rent for the said fields in an amount equivalent to 15% of the gross produce of said fields, for the periods beginning crop-year 1950-51 until said fields shall have been surrendered to petitioners, deducting from the amount due petitioners the sum of P12,460.24 advanced by private respondent Gaspar Vicente. SO ORDERED. Feria (Chairman), Alampay, Gutierrez, Jr. and Paras, JJ., concur.

[GRN 29512 January 17, 1929] ONG CHUA, plaintiff and appellee, vs. EDWARD CARR ET AL., defendants and appellants. 1.WITNESSES; ADMISSIBILITY OF TESTIMONY AGAINST A DECEASED PERSON.-Subsection 7 of section 383 of the Code of Civil Procedure bars the plaintiff, upon a claim or demand against the estate of a deceased person, from testifying as to any matter of fact occurring before the death of such deceased him in effect that the loan could not be made upon property the titles to which were not clear and that the right of Teck and Lim to repurchase were not entered upon the certificates of title to the property. Moore also told Carr that the deed of sale could be made in such a form that Carr's title to the property purchased would appear to be absolute but that Carr was to bear in mind that the rights of Teck and Lim still existed and that the deed and other documents must be left in his, Moore's, possession until the expiration of the term for the right of repurchase and that, if the deed were made in that form, the loan of P6,500 could be obtained. Moore thereupon instructed his clerk, C. E. Darlucio, to prepare and typewrite the deed of sale without including therein the condition that the sale was subject to Teck's and Lim's rights to repurchase. The deed was signed by Ong Chua in the presence of Darlucio and duly acknowledged before Moore as notary public. It may be noted that Ong Chua, did not understand English and was therefore ignorant of the arrangement arrived at between Moore and Carr in connection with the loan, but he asked Moore if the document contained the conditions in reference to Teek's right to repurchase the property and was told that the document was sufficient. After the deed was prepared and signed, Ong Chua told Carr and Moore that lot No. 137 was mortgaged by him to the Bank of the Philippine Islands for P6,500, the rate of interest being 10 per cent per annum. Moore stated that the Zamboanga Building and Loan Association could not lend money at less than 13 per cent per annum. Ong Chua then stated that he was willing to let the mortgage on the lot given to the bank stand until the expiration of the term for the repurchases. As this arrangement would save Carr a considerable sum of money, he agreed to the proposition and paid only P13,500 in cash and promised, in writing, to pay to the vendor the balance of the purchase price, P6,500, with interest at 10 per cent per annum, on or before July 1, 1927. The loan from the Building and Loan Association thus became unnecessary, but instead of redrafting the deed, it was agreed that Moore would keep the deed and the other documents in his custody and would not deliver them to any one until the expiration of the period for repurchase. In September, 1926, Moore was taken critically ill, and while he was under medical treatment in the Zamboanga Hospital, Carr came to him on various occasions and demanded that the documents be delivered to him. At first Moore refused to make the delivery on the ground that it was contrary to their agreement and might result to the prejudice of the rights of Teck and Lim, but Carr continued to molest Moore with his demand for the delivery of the, papers, and finally, in order to escape further annoyances and insinuations of Carr, he surrendered the deed to the latter, who almost immediately presented it to the register of deeds for registration. In July, 1926, Teck offered to repurchase the property in question from Ong Chua who thereupon demanded of Carr the reconveyance of the property to the spouses, Teck and Lim, but Carr refused to do so, claiming that he had an absolute title to said property,.and Ong Chua then learned, for the first time, that the deed in question contained no reference to the rights of Teck and Lim to repurchase the property. On July 23, 1926, this action wasbrought, the plaintiff alleging in substance the principal facts hereinbefore stated and demanding that the deed in question be reformed in accordance therewith. The defendant demurred, but the demurrer was overruled. The defendant thereupon filed an answer pleading the general issue and setting up as special defenses that the deed in question contained no stipulation as to rights of repurchase and that if there was any agreement or promise on the part of the defendant to convey the property to Henry E. Teck and Magdalena Lim or to the plaintiff, as alleged in the complaint, such agreement and promise was for the sale of real property, or an interest therein, and that adverse party to clearly establish the alleged fraudulent acts before admitting such testimony."

And in the case of Tongco vs. Vianzon (50 Phil., 698, 702) this court said: "Counsel is eminently correct in emphasizing that the object and purpose of this statute is to guard against the temptation to give false testimony in regard to the transaction in question on the part of the surviving party. He has, however, neglected the equally important rule that the law was designed to aid in arriving at the truth and was not designed to suppress the truth." In this case a number of credible witnesses testified to facts which conclusively showed that Carr's conduct was tainted with fraud. The plaintiff did not take the witness stand until after the existence of fraud on the part of Carr had been established beyond a doubt and not by a mere preponderance of evidence. In these circumstances, we cannot hold that the trial court erred in not excluding the plaintiffs testimony. In regard to the second proposition above-mentioned, counsel for the appellant says: "It is our belief which is supported by the very exhibits themselves that at this conference the parties decided to enter into two separate agreements. One in writingExhibit A being an absolute conveyance of the property from Ong Chua to Edward Carr; the other a verbal agreement by which all the documents, titles, etc. were left with P. J. Moore in escrow until the time fixed in Exhibits B and C had lapsed. There was no mistake on the part of anyone in executing Exhibit A for while there has been a great deal of talk about the insertion of a clause no one has yet said what was to be said in that clause or condition. Again, Exhibit A not only said nothing about any right to redemption but contains a full warranty of title * * *." It will be noted that counsel admits that the deed was left in escrow with Moore, and if it were true that there was no mistake on the part of the plaintiff at the time of the execution of the deed, a suit for reformation would hardly be appropriate. But that would not improve the appellant's position. It is well settled that the condition upon which a deed is delivered in escrow may be proved by parol evidence and that ordinarily the statute of frauds has no application to such an agreement, nor is it affected by the rule of evidence, which prohibits a written contract from being contradicted or varied by parol. evidence (Devlin on Real Estate, 3d ed., par. 312-A and authorities there cited). It is also well established that an escrow delivered without authority or obtained fraudulently passes no title (Smith vs. South Royalton Bank, 32 Vt., 341; 76 Am. Dec., 179). That is what occurred here; Moore had no authority whatever to deliver the deed in escrow to Carr before the expiration of the time for redemption. It follows that the certificates of title issued to Carr were of no legal effect and that the suit for the rescission of the deed and the cancellation of the corresponding certificates of title would be in order (see the last two provisos in sec. 55 of Act No. 496). So much for the appellant's theory. We think, however, that the evidence is conclusive that the plaintiff had no clear conception of the contents of the deed. That he was anxious to protect the rights of redemption held by the parties who sold the land to him, is very obvious; indeed, if he had failed to do so, he would have laid himself open to an action for damages. But the deed was written in the English language, with which the plaintiff was unfamiliar, and he had to rely on the statements of Moore as to the contents and effect of the deed and was told that the document was sufficient. He had confidence in Moore, with whom he had had previous business relations, and it was but natural for him to believe Moore's statement. Carr, on the other hand, knew the contents of the deed and fully agreed to Moore's plan to place it in escrow until the expiration of the term for the repurchase or redemption of the land. He, nevertheless, in violation of provisions of a general statute of limitations, and the purchaser will be protected by his adverse possession for the statutory period. 3. ID.; SALE OF LAND; RIGHTS OF PURCHASER.-The defendants in the present case having been in adverse possession of the land in question for more than ten years, have acquired title by prescription under section 41 of the Code of Civil Procedure. APPEAL from a judgment of the Court of First Instance of Albay. Rosauro, J. The facts are stated in the opinion of the court. Leoncio Imperial for appellant. Domingo Imperial for appellees. OSTRAND, J.: This is an action in ejectment brought on January 19, 1926, by Felipe Palencia, in his capacity as administrator of the estate of the deceased Maria Palencia, against Irene Jaucian de Del Rosario and her husband, Jose del Rosario. The complaint was subsequently amended by including the minor Remedios Lopez as a party defendant. In their answer, the defendants allege that Irene Jaucian de Del Rosario is the owner of an undivided one-half share in the land, the other half belonging to Remedios Lopez, who acquired it through a donation made by her father, Ricardo Lopez, the first husband of the defendant Irene Jaucian, the donation being evidenced by a public document executed on September 9, 1913. As a special defense, the defendants allege that said Ricardo Lopez, then the legitimate husband of Irene Jaucian, acquired the land in good faith by a deed executed on April 22, 1913, by Bernabea Orzales, in her capacity as the then administratrix of the estate of the deceased Maria Palencia, for the sum of P6,000; that the sale was authorized by an order of the Court of First Instance of the Province of Albay; and that the defendants, since the sale, have been in actual, open, public, and continuous possession of the land under a claim of title exclusive of any right to all other claimants. the statutory period. (Pierce vs. Vansel, 35 Ind. A., 525; Kerlec vs. New Orleans Land Co., 130 La., 111; Kleinecke vs. Woodward, 42 Tex., 311.) In the present case the land was purchased in good faith, and the defendants, by themselves and through their predecessor in interest, have been in adverse possession of the land in question for more than the statutory

period. They have therefore acquired title by prescription under section 41 of the Code of Civil Procedure. It is consequently unnecessary to discuss the other questions raised by the appellant. The appealed judgment is affirmed with the costs against the appellant. So ordered. Johnson, Street, Malcolm, Villamor, Johns, Romualdez, and Villa-Real, JJ., concur. Judgment affirmed.

[GRN 31739 March 11, 1930] LEONOR MENDEZONA, plaintiff and appellee, vs. ENCARNACION C. VIUDA DE GOITIA, administratrix of the estate of Benigno Goitia, defendant and appellant. [GRN 31740 March 11, 1930] VALENTINA IZAGUIRRE Y NAZABAL, plaintiff and appellee, vs. ENCARNACION C. VIUDA DE GOITIA, ETC., defendant and appellant. 1. PLEADING AND PRACTICE; AMENDMENT OF PLEADINGS.-As in other ordinary actions in which the pleadings may be amended, the amounts claimed in the complaint presented in the instant case before the committee of claims and appraisal, were changed in the complaint which was filed in the court and approved by the same without exception from the other party. There was no change of the nature of the action, because both complaints contained the same allegations to the effect that the plaintiffs had not received the amounts claimed as dividends due on their shares in the partnership styled "Tren de Aguadas." 2. ID.; DEMURER FOR MISJOINDER.-Since the bill of exceptions does not show that the appellant demurred on the ground, of misjoinder of parties; or alleged such misjoinder in her answer, in accordance with section 93 of the Code of Civil Procedure she must be deemed to have waived her right to raise any objection on that ground. 3. ID.; ORDER FOR ACCOUNTING.-The order of the court enjoining the appellant to render an account of all the amounts collected by her late husband, as representative and attorney-in-fact of, the plaintiffs, was made for the purpose of giving her an opportunity of showing, if she could, just what amounts the decedent had received on account of the plaintiffs' shares. This showing was proper because the action was to demand the reimbursement of said amounts. 4. ID.; LEGAL PROHIBITION TO TESTIFY.-The law prohibits a witness directly intereited, in a claim against the estate of a decedent from testifying upon a matter of fact which took place before the death of the deceased. The underlying principle of this prohibition is to protect the estate from fictitious claims; but it should not be understood to prohibit the filing of a just claim against the decedent's estate. APPEAL from a judgment of the Court of First Instance of Manila. Revilla, J. The facts are stated in the opinion of the court. Avancea & Lata for appellant. Ramon Sotelo for appellees. VILLAMOR, J.: The plaintiffs, Leonor Mendezona and Valentina Izaguirre y Nazabal, filed separate claims with the committee of claims and appraisal against the intestate estate of Benigno Goitia y Lazaga (Court of First Instance of Manila, civil case No. 30273), the first for the amount of P5,940, and the second, P2,376. By order of the court dated June 16, 1927, these claims were heard by the committee. The claimants presented their evidence, which the committee deemed insufficient and disapproved their claims. Both claimants appealed from the report of the committee, and in accordance with, section 776 of the Code of Civil Procedure filed a new complaint which was later amended with the approval of the court, there being nothing in the bill of exceptions to show, that the defendant, or the administratrix: of the deceased Benigno Goitia, excepted to the court's order admitting the amendments to thee complaints. The defendant answered the amended complaints, pleading in special defense, that not having intervened in any of the transactions of Benigno Goitia y Lazaga as attorney-in-fact of the plaintiffs, and having no knowledge of the supposed management of their rights in the "Tren de Aguadas," and, furthermore, not having seen nor received, any money of the plaintiff's from said business, she is not in a position to render an account of any sort to the plaintiffs, either in her own personal capacity or as judicial administratrix of Benigno Goitia's intestate, estate. By agreement of the parties, both cases were tried together, and the trial court rendered but one decision upon them on October 31, 1928, holding it sufficiently proved,. "that defendant Encarnacion C. Vda. de Goitia. has been. duly appointed judicial administratrix of the estate of her deceased husband Benigno Goitia in special proceeding No. 30273 of this court; that Benigno Goltia was the representative and attorney-in-fact of the plaintiffs in the jointaccount partnership known as the Tren de Aguadas' and located in the City of Manila, of which the plaintiff Leonor Mendezona, widow of Juan Bautista Goitia, owns 180 shares worth P18,000, and the plaintiff Valentina Izaguirre y Nazabal owns 72 shares worth P7,200; that prior to 1915, Benigno, Goitia, at that time the manager of the aforesaid copartnership, collected the dividends for the plaintiffs, which he remitted to them every year; that prior to 1915, the usual dividends which Benigno Goitia forwarded to plaintiff Leonor Mendezona each year were P540, and to plaintiff Valentina Izaguirre y Nazabal, P216; that from 1915 until his death in August, 1926, Benigno Goitia failed to remit to them the dividends upon their shares 'Tren de Aguadas'; that some time before his death, more particularly, in July, 1926, Benigno Goitia, who was no longer the

manager of the said business, received as attorney-in-fact of both plaintiffs, the amount of P90 as dividend upon plaintiff Leonor Mendezona's shares, and P36 upon Valentina Izaguirre y Nazabal's stock, that from 1915 to 1926, the 'Tren de Aguadas' paid dividends to the shareholders, one of them, Ramon Salinas, having received the total amount of P1,155 as ordinary and special dividends upon his 15 shares; that calculating the dividends duo from 1915 to 1926 upon Leonor Mendezona's 180 shares at P540 per annum, and at P216 yearly upon the 72 shares held by Valentina Izaguirre y Nazabal, counsel for both plaintiffs filed their claims with the committee of claims and appraisal of the estate of Benigno, Goitia, and, upon their disallowance, appealed from the committee's decision by means of the complaints in these two cases." The trial court likewise deemed it proven that "during the period from 1915 to 1926, Benigno Goitia. collected and received certain sums as dividends and profits upon the plaintiffs' stock in the 'Tren de Aguadas' in his capacity as representative and attorney-in-fact for both of them, which he has neither remitted nor accounted for to the said plaintiffs, although it has been proved that said Benigno Goitia was their attorney-in-fact, and representative in the 'Tren de Aguadas' up to the time of his death." The court below therefore ordered the defendant, as judicial administratrix of Benigno Goitia's estate to render a judicial account of the intestate estate of the deceased Benigno Goitia, in special proceeding No. 30273 of this court (below), to render an account of the amounts collected by her aforesaid husband Benigno Goitia, as attorney-in-fact and representative of the plaintiffs Leonor Mendezona and Valentina Izaguirre y Nazabal in the copartnership known as, the "Tren de Aguadas" from 1915 to July, 1926, within thirty days from notice of this decision; and that the defendant may see, examine, and make a copy of the books and documents relative to the business of the aforementioned copartnership, in accordance with the provisions of section 664 of the Code of Civil Procedure. Without special pronouncement of costs. On December 15, 1928, at the instance of the plaintiffs, the trial court set the 15th of January, 1929, as the date on which the defendant should present her account of the dividends and profits collected by the decedent, as attorneyin-fact for the plaintiffs, with regard to the "Tren de Aguadas" copartnership, from 1915 to 1926, and the hearing was postponed to the 7th of February, 1929. On February 6, 1929, the defendant, reiterating her exception to the court's decision enjoining her to render accounts, manifested that after a painstaking examination of the books of account of the copartnership "Tren de Aguadas," and several attempts to obtain data from Ruperto Santos, the manager and administrator thereof, she has found no more evidence of any amount received by her late husband, Benigno de Goitia, than a book of accounts where she came upon an item of P90 for Leonor Mendezona, and another of P36 for Valentina Izaguirre. In view of this report and the evidence taken at the hearing, the court rendered a suppletory judgment, upon motion of the plaintiffs dated December 3, 1928; and taking into account chiefly the testimony of Ruperto Santos and Ramon Salinas, it was held that, upon the basis of the dividends received by the witness Salinas on his fifteen shares in the "Tren de Aguadas" from 1915 to 1925, it appears that the dividends distributed for each share was equal to onefifteenth of P1,087.50, that is P72.50. Thus the dividends upon plaintiff Leonor Mendezona's 180 shares would be P13,050, and upon the 72 shares pertaining to Valentina Izaguirre, P5,220; and these sums, added to those collected by the attorney-in-fact Benigno Goitia as part of the 1926 dividends, P90 for Leonor Mendezona, and P36 for Valentina Izaguirre, show that Benigno, Goitia thereby received P13,140 in behalf of Leonor Mendezona, and P5,256 in behalf of Valentina Izaguirre. Wherefore, the court ordered the defendant, as judicial administratrix of the estate of the deceased Benigno Goitia, to pay the plaintiff Leonor Mendezona the sum of P13,140 with legal interest from the date of the filing of the complaint, and to pay the plaintiff Valentina Izaguirre P5,256 likewise with legal interest from the date of the filing of the complaint, and moreover, to pay the costs of both instances. The defendant duly appealed from this judgment to this Supreme Court through the proper bill of exceptions. The fundamental question raised by the appellant in the first assignment of error refers to the court's jurisdiction to admit the amended complaints whereby the plaintiffs claim P13,680 and P5,470, respectively, whereas the claims presented to the committee of claims and appraisal were only for P5,940 and P2,376, respectively. Appellant contends that the plaintiffs have not perfected their appeal in accordance with section 773 of the Code of Civil Procedure in claiming more in their complaints than in the claims filed with the committee of claims and appraisal, by including therein, not only the yearly dividends paid from 1915 to 1925, inclusive, but also the ordinary and extraordinary dividends upon their shares for the years of 1915 to 1926, alleged to have been delivered to Benigno Goitia. The fact that the claims filed with the committee were upon the basis of annual dividends, while those filed with the court below were on ordinary and extraordinary dividends, is of no importance, for, after all they refer to the same amounts received by the deceased Benigno Goitia in the name and for the benefit of the plaintiffs. The question to be decided is whether or not in this jurisdiction a greater sum may be claimed before the court than was claimed before the committee. It should be noted that according to the cases cited by the appellant on pages 12 and 13 of her brief, to wit, Patrick vs. Howard, 47 Mich., 40; 10 N. W., 71, 72; Dayton vs. Dakin's Estate, 61 N. W., 349; and Luizzi vs. Brady's Estate, 113 N. W., 574; 140 Mich., 73; 12 Detroit Leg., 59, the claims passed upon by the committee cannot be enlarged in the Circuit Court by amendment. But counsel for the appellees draws our attention to the doctrines of the Vermont Supreme Court (Maughan vs. Burns' Estate, 64 Vt., 316; 23 Atlantic, 583), permitting an augmentative amendment to the claim filed with the committee. In the Maughan case, supra, the court stated:

"ROWELL, J. This is an appeal from the decision and, report of the commissioners on the estate of Michael Burns. Plaintiff presented her claim to the commissioners at $2,789.65. The ad damum in her declaration filed in the probate court was $3,500. In the county court she recovered $3,913.49. Thereupon she moved for leave to amend her declaration by raising the ad damnum, to $4,000, which was granted, and she had judgment for the amount of her recovery. The identical claim presented to the commissioners was the claim tried above. The amount of plaintiff's recovery rested on the quantum meruit. The jury found that she merited more than she estimated her claim when she presented it to the commissioners. But such underestimate did not preclude her from recovering more, if the testimony show her entitled to it, as presumably it did, as more was found. The fact of such estimate was evidence against her deserving more, as it was an implied (admission that what she claimed was enough; but the admission was not conclusive upon her, and did not prevent her from recovering more. (Rooney vs. Minor, 56 Vt., 527; Stowe vs. Bishop, 58 Vt., 498; 3 At]. Rep., 494; Hard vs. Burton, 62 Vt., 314; 20 Atl. Rep., 269.) "It is conceded that in common-law actions the court has power to raise the ad damnum at any time; but it is claimed that as the probate court is not a common-law court, ,but is a court of special and limited jurisdiction, and has by statute original jurisdiction of the settlement of the estates of deceased persons, the county court has no power to raise the ad damnum of the declaration filed in the probate court. The county court has, by statute, appellate jurisdiction of matters originally within the jurisdiction of the probate court and in such appeals it sits as a higher court of probate, and its jurisdiction is co-extensive with that of the probate court. It is not limited to the particular questions that arose in the probate court in the matter appealed, but is expressly extended to matters originally within the jurisdiction of that court. It is an appellate court for the rehearing and the re-examination of matters-not particular questions merely-that have been acted upon in the court below. (Adams vs. Adams, 21 Vt., 162.) And these matters embrace even those that rest in discretion. (Holmes vs. Holmes, 26 Vt., 536.) In Francis vs. Lathrope, 2 Tyler, 372, the claimant was allowed, on terms, to file a declaration in the county court, he having omitted to file one in the probate court as required by statute. It was within the jurisdiction of the probate court to have allowed this amendment, and, as the county court had all the jurisdiction of the probate court in this behalf, it also had power to allow the amendment." However this may be, in this jurisdiction there is a rule governing the question raised in this assignment of error, namely, section 776 of the Code of Civil Procedure, as construed in the cases of Zaragoza vs. Estate of De Viademonte (10 Phil., 23) ; Escuin vs. Escuin (11 Phil., 332) ; and In re Estate of Santos (18 Phil., 403). This section provides: "SEC. 776. Upon the lodging of such appeal with the clerk, the disputed claim shall stand for trial in the same manner as any other action in the Court of First Instance, the creditor being deemed to be the plaintiff, and the estate the defendant, and pleadings as in other actions shall be filed." Just as in ordinary actions in which the pleadings may be amended, so in the instant case, the original complaint for the same amounts claimed before the committee was altered, increasing the amounts, and the amended complaint was approved by the court and not objected to by the adverse party. The character of the action throughout is the same. The action, before the committee rested on the contention that as attorney-in-fact for the plaintiffs with respect to the partnership "Tren de Aguadas," the late Benigno Goitia had received dividends upon their shares, which he failed to turn over to them, the appeal to the Court of First Instance is founded on the same contention. When the claim was filed with the committee, counsel for the plaintiffs merely made a calculation of the amounts due, in view of the fact that he had not all the data from the plaintiffs, who live in Spain; but after filing the complaint an appeal with the Court of First Instance, he discovered that his clients were entitled to larger sums, and was therefore compelled to change the amount of the claims. Considering the distance that separated the plaintiffs from their attorney-in-fact, the deceased Benigno Goitia, and that the latter failed to supply them with data from 1915 until his death in 1926, it is natural that they had to resort to calculating the amounts due them from the "Tren de Aguadas." To deny them the right to amend their complaint in accordance with section 776, when they had secured more definite information as to the amounts due them, would be an injustice, especially when it is taken into consideration that this action arises from trust relations between the plaintiffs and the late Benigno Goitia as their attorney-in-fact. The first error is therefore overruled. The allegation found in the second assignment of error that the plaintiffs are not in reality interested parties in this case is untenable. It does not appear from the bill of exceptions that the appellant demurred on the ground of, misjoinder of parties, or alleged such misjoinder in heranswer. In accordance with section 93 of the Code of Civil Procedure, the appellant has waived the right to raise any objection on the ground that the plaintiffs are not the real parties in interest, or that they are not the owners' of the stock in question. (Broce vs. Broce, 4 Phil., 611; and Ortiz vs. Aramburo, 8 Phil., 98.) Furthermore it appears pears from Exhibits D, E, F, and G, that the late Benigno Goitia recognized that those shares of the "Tren de Aguadas" really belonged to the plaintiffs. And above all, Exhibit K-1, which is a copy of the balance sheet for May and June, 1926, taken from the books of the partnership, clearly shows that Leonor Mendezona owned 190 shares, and Valentina Izaguirre, 72 shares. Therefore the appellant cannot now contend that the plaintiffs are not the real interested parties. In the third assignment of error it is argued that following section 676 of the Code of Civil Procedure, the court below had no power to order the defendant to render an account of dividends supposed to have been received by her deceased husband. We are of opinion that the order of the court enjoining the appellant to render an account of all the amounts collected by her aforesaid husband Benigno Goitia as representative and attorney-infact of the plaintiffs, from 1915 until June, 1926, was made for the purpose of giving her an opportunity of

showing, if she could, just what amounts the deceased Goitia received on account of the appellees' stock. There is no reversible error in this; for, as the complaint demanded the return of amounts alleged to have been received by the deceased attorney-in-fact -represented by the appellant, it was quite in order to determine whether such amounts were, really received or not. The fourth assignment of error relates to Exhibits A and B, being the appellees' depositions made before the American consul at Bilbao, Spain, in accordance with section 356 of the Code of Civil Procedure. Counsel for the appellant was notified of the taking of these depositions, and he did not suggest any other interrogatory in addition to the questions of the committee. When these depositions were read in court, the defendant objected to their admission, invoking section 383, No. 7, of the Code of Civil Procedure. Her objection referred mainly to the following questions' Mendezona vs. C. Viuda de Goitia "1. Did Mr. Benigno Goitia render you an account of your partnership in the 'Tren de Aguadas?--Yes, until the year 1914. '"2. From the year 1915, did Mr. Benigno Goitia send you any report or money on account of profits upon your shares ?--He sent me nothing, nor did he answer, my letters. "3. Did you ever ask him to send you a statement of your account?--Yes, several times by letter, but I never received an answer." The first of these questions tends to show the relationship between the principals and their attorney-in-fact Benigno Goitia up to 1914. Supposing it was error to permit such a question, it would not be reversible error, for that very relationship is proved by Exhibits C to F, and H to I. As to the other two questions, it is to be noted that the deponents deny having received from the deceased Benigno Goitia any money on account of profits on their shares, since 1915. We are of opinion that the claimants' denial that a certain fact occurred before the death of their attorney-in-fact Benigno Goitia does not come within the legal prohibitions (section 383, No. 7, Code of Civil Procedure). The law prohibits a witness directly interested in a claim against the estate of a decedent from testifying upon a matter of fact which took place before the death of the deceased. The underlying principle of this prohibition is to protect the intestate estate from fictitious claims. But this protection should not be treated as an absolute bar or prohibition from the filing of just claims against the decedent's estate. The facts in the case of Maxilom vs. Tabotabo (9 Phil., 390), differ from those in the case at bar. In that case, the plaintiff Maxilom liquidated his accounts with the deceased Tabotabo during his lifetime, with the result that there was a balance in his favor and against Tabotabo of P312.37, Mexican currency. The liquidation was signed by both Maxilom and Tabotabo. In spite of this, some years later, or in 1906, Maxilom filed a claim against the estate of Tabotabo for P1,062.37, Mexican currency, alleging, that P750 which included the 1899 liquidation had. not really been received, and that therefore instead of P312.37, Mexican currency, that liquidation should have shown a balance of P1,062.37 in favor of Maxilom. It is evident that. in view of the prohibition of section 383, paragraph 7, of the Code of Civil Procedure, Maxilom could not testify in his own behalf against Tabotabo's estate, so as to alter the balance of the liquidation made by and between himself and the decedent. But in the case before us there has been no such liquidation between the plaintiffs and the deceased Goitia. They testify, denying any such liquidation. To apply to them the rule that "if death has sealed the lips of one of the parties, the law seals those of the other," would be to exclude all possibility of a claim against the testamentary estate. We do not believe that this was the legislator's, intention. The plaintiffs-appellees did not testify to a fact which took place before their representative's death, but on the contrary denied that it had taken place at all, i. e. they denied that a liquidation had been made or any money remitted on account of their shares in the "Tren de Aguadas" which is the ground of their claim. It was incumbent upon the appellant to prove by proper evidence that the affirmative proposition was true, either by bringing into court the books which the attorney-in-fact was in duty bound to keep, or by introducing copies of the drafts kept by the banks which drew them, as was the decedent's usual practice according to Exhibit I, or by other similar evidence. The appellant admits having found a book of accounts kept by the decedent showing an item of P90 for the account of Leonor Mendezona and another of P36 for the account of Valentina Izaguirre, which agrees with the statement of Ruperto Santos, who succeeded Benigno Goitia in the administration of said partnership, to the effect that the deceased attorney-in-fact had collected the amounts due the plaintiffs as dividends on their shares for the months of May and been distributed among the shareholders, and that the late Benigno Goitia received the dividends due on the shares pertaining to Leonor Mendezona and Valentina Izaguirre, deducting them from the total distribution. In view of these data, the court below reached the conclusion, on the basis of the dividends received by partner Ramon Salinas, that the attorney-in-fact Benigno Goitia received, for the plaintiffs-appellees, respectively, the amounts of P13,140 and P5,256, including the dividends for 1926, or P90 for Leonor Mendezona, and P36 for Valentina Izaguirre. As to the interest imposed in the judgment appealed from, it is sufficient to cite article 1724 of the Civil Code, which provides that an agent shall be liable for interest upon any sums he may have applied to his own use, from the day on which he did so, and upon those which he still owes, after the expiration of the agency, from the time of his default. The judgment appealed from being in accordance with the merits of the case, we are of opinion, and so hold, that the same must be, as it is hereby, affirmed, with costs against the appellant. So ordered. Johnson, Malcolm, Ostrand, Johns, Romualdez, and VillaReal, JJ., concur. Judgment affirmed.

[GRN L-8334 December 28, 1957] BIENVENIDO BABAO, ETC., plaintiff and appellee, vs. FLORENCIO PEREZ, ETC., ET AL.-. defendants and appellants. 1. STATUTE OF FRAUDS; CONTRACTS WHICH ARE NOT TO RE PERFORMED WITHIN ONE YEAR; PARTIAL PERFORMANCE BY 0NE PARTY, EFFECT OF.-Contracts which by their terms are not to be performed within one year may be taken out of the Statute of Frauds through Performance by one party thereto. In order, however, that a Partial performance of the contract may take the case out of the operation of the statute, it must appear clear that the full performance has been made by one party within one year, as otherwise the statute would apply. 2. ID.; PAROL CONTRACT FOR THE SALE OF LAND; ENFORCEMENT OF CONTRACT ON THE GROUND OF PART PERPOPMANCE.-Where the contract is vague and ambiguous, the doctrine of part performance cannot be invoked to take the case out of the operation of the statute of frauds. Obviously, there can be no part performance until there is a definite and complete agreement between the parties. In order to warrant the specific enforcement of a parol contract for the sale of land, on the ground of part performance, all the essential terms of the contract must be established by competent proof, and shown to be definite, certain, clear and unambiguous. (Cuyugan vs. Santos, 34 Phil., 100, 101.) 3. CLAIMS AGAINST ESTATES OF DECEASED PERSONS; PAROL EVIDENCE ON MATTERS OCCURRING BEFORE DEATH, NOT ADAMISSIBLE.-In the action for the recovery of the parcel of land in question belonging to the deceased C. P., the plaintiff alleges fraud in the sale thereof in that it was made in vioiation of the verbal agreement entered into between the deceased owner and the deceased 'S.B., whereby the la tter bound himself to improve the said forest land and convert it into a veritable farm, and that in consideration of the said undertaking, the deceased owner bound herself to give and deliver to S.B. or his wife, 1/2 of the whole area of said land. Defendants objected to the admission of the testimony of the plaintiff, judicial administrator of the estate of the late S.B., as to what occurred between C.B. and S.E. with regard to the agreement, on the ground that said testimony was prohibited by section 26 (c) of Rule 123 of the Rules of Court. The trial court overruled the opposition saying that said rule did not apply where the complaint against the estate of a deceased pcrson alleges fraud, citing the case of Ong Chua vs. Carr, 53 Phil. 960. Held; The court is in error because if in that case the witness was allowed to testify it was because the existence of fraud was first established by sufficient and competent evidence. Here, however, the alleged fraud is predicated upon the existence of the agreement itself which violates the rule of petition principle. Evidently, the fraud to exist must be established by evidence aliunde and not by the same evidence which is sought to be prevented. APPEAL from a judgment of the Court of First Instance of Batangas. Enriquez, J. The facts are stated in the opinion of the Court. Ozaeta, Lichauco & Picazo for appellants. Feria, Manglapuz & Associates for appellee. BAUTISTA ANGELO, J.: This is an action to recover one-half (1/2) of a parcel of land containing an area of 156 hectares situated in San Juan, Batangas, plus the value of the produce gathered thereon from August, 1947 until actual recovery and in the alternative, to recover the sum of P47,000 representing reimbursement of the amount of useful and necessary expenses incurred to clear and improve the aforesaid land. Plaintiff is the judicial administrator of the estate of the late Santiago Babao while defendant Florencio Perez is the judicial administrator of the estate of the late Celestina Perez. The other defendants are purchasers and actual owners of portions of the land which is sought to be recovered in the present litigation. The complaint alleges that Celestina Perez was in her lifetime the owner of the parcel of land in question which was not registered either under Act 496 or under the Spanish Mortgage Law; that sometime in 1924 when the deceased Santiago Babao married Maria Cleofe Perez, niece of Celestina Perez, the latter and the former entered into a verbal agreement whereby Santiago Babao bound himself to improve the land by levelling and clearing all the forest trees standing thereon and planting in lieu thereof coconuts, rice, corn and other crops such as bananas and bamboo trees, and to act at the same time as administrator thereof during the lifetime of Celestina Perez, all expenses for labor and materials to be at his cost, in consideration of which Celestina in turn bound herself to convey to Santiago Babao or his wife 1/2 of the land, together with all the improvements thereon upon her death; that pursuant to said verbal agreement, Santiago Babao in 1924 left his job as administrator of the Llana Estate in San Juan, Batangas for which he was receiving a salary of P150 a month, and started levelling and clearing the land having planted in an area of 50 hectares 5,000 coconuts trees, and rice and corn in another area of 70 hectares, leaving out only about 50 hectares unimproved, all of which having been administered by him from 1924 to 1946; that for clearing and improving the portions of land abovementioned, he incurred expenses amounting to P7,400 which added to his salary as administrator from 1924 to 1946 at the rate of P150 a month amounting to P39,600, makes a total of P47,000; that in violation of the aforesaid verbal agreement, Celestina Perez, acting through Leovigildo Perez, to whom she extended a power of attorney to sell, sold few days before she died about 127 1/2 hectares of the land in question in consequence of which Santiago Babao was deprived of the possession and administration thereof from 1945; that said sales were fictitious and were made in clear violation of the oral agreement made between Celestina Perez and

Santiago Babao and as such the same are null and void; that Celestina Perez died on August 24, 1947 as a result of which intestate proceedings were instituted for the settlement of her estate and one Florencio Perez was named as judicial administrator; that Santiago Babao died on January 6, 1948 and as a consequence intestate proceedings were instituted for the settlement of his estate and Bienvenido Babao was appointed judicial administrator; and that in the event the estate of Santiago Babao failed to recover ,the 1/2 portion of the land herein litigated, said estate would suffer an irreparable damage of not less than. P366,700 representing fruits which it has failed to receive during the last 20 years. Wherefore, plaintiff prayed for the conveyance of 1/2 portion of the land in question and for annulment of the sales of the portion thereof for having been made factitiously, and in the alternative, for judgment in plaintiff's favor for the sum of P47,000 representing the amount of useful and necessary expenses incurred by Santiago Babao in improving the land in line with the oral agreement. Defendants denied plaintiff's claim that a verbal agreement was entered into between Celestina Perez and Santiago Babao relative to the clearing, improving and administering the land belonging to the former having an area of 156 hectares, as well as the other claim that Santiago Babao had actually cleared and improved a great portion thereof at a cost of around P7,400. They alleged that in 1924 and for many years prior thereto, the land in question had already been cleared and cultivated for agricultural purposes with an exception of a portion of 50 hectares; that said land was cleared and cultivated due partly to the effort made by Celestina's husband, Esteban de Villa, her overseers and tenants, and partly to the "trusco" system employed by them whereby persons were allowed to clear the land and plant thereon and from the harvest were compensated according to a graduated scale of division varying from year to year; that the coconut trees, banana plants and bamboo trees now standing thereon were planted not by Santiago Babao nor at his expense but by the tenants of the spouses Esteban de Villa and Celestina Perez who were duly compensated according to the "trusco" system; that although Santiago Babao and Maria Cleofe Perez were married in 1924, the former did not have anything to do with the land in question for Esteban de Villa was then still living and actively managed the same with the help of his overseer and tenants until he died in 1930; that it was only in that year when Santiago Babao be-an administering the land in the capacity of a nephew of Celestina until 1935 when Celestina, disgusted with the conduct of Santiago, left the company of Santiago and his wife and went to live with her nephew Bernardo Perez until her death in 1947; that since then Celestina Perez prohibited Santiago from interfering with the administration of the land and designated another person in his place, and for the work he did from 1930 to 1935, he was more than compensated because the proceeds of the harvests during said years were all given to him and his wife and Celestina was given only what was barely sufficient for her maintenance. Defendants also alleged that the sales made by Celestina Perez through her attorney-in-fact Leovigildo Perez of several portions of the land were not fictitious as alleged but were made with full knowledge and authority of Celestina who executed in favor of Leovigildo Perez a power of attorney under the authority of a notary public in the presence of Santiago Babao himself who did not interpose any objection to the execution of said power of attorney and, therefore, said sales are real, valid and genuine, having been executed in accordance with law, Defendants prayed that the complaint be dismissed with costs, after awarding to them moral damages in the amount that the court may deem proper to fix. After hearing, the court rendered judgment the dispositive part of which reads: "WHEREORE, judgment is rendered in favor of the plaintiff and against the defendants, (1) Declaring the sales of Lupang Parang by and between the defendants, fraudulent and fictitious, null and void; (2) 'Ordering defendant Florencio Perez as administrator of the testate estate of the deceased Celestina Perez, to pay plaintiff the sum of P3,786.66 annually from August 25, 1947 until delivery of the land to the latter, with interest thereon at the rate of 6 per cent per annum from the date of the filing of the complaint; (3) Divesting the title of defendants over 1/2 of Lupang Parang both in quantity and quality and vesting title thereover in plaintiff pursuant to section 10 of Rule M To carry out this judgment, the Clerk of Court is hereby appointed representative of this Court to designate a disinterested surveyor for the necessary survey and division, the expenses therefor to be defrayed half and half by plaintiff and Florencio, Perez, (4) Ordering defendants to surrender the possession of the half adjudicated and vested in favor of the plaintiff after the same has been designated under the proceeding paragraph; and (5) To pay the costs." Defendants in due time took the case on appeal to the Court of Appeals where the parties submitted their respective briefs within the reglementary period, and thereafter the court rendered judgment reversing in toto the decision appealed from and dismissing the case without pronouncement as to costs. But when its attention was called, thru a proper motion, that that court acted without jurisdiction because the amount involved was more than P50,000, the court in a resolution entered on August 14, 1954 set aside its decision and forwarded the case to us to have the case remanded to the Court of Appeals proved futile. While this case was pending in the lower court, counsel for appellants filed a motion to dismiss on the ground, among others, that the alleged verbal agreement between Santiago Babao and Celestina Perez was unenforceable under the Statute of Frauds. The trial court denied this' motion on the ground that it appears from the complaint "that Santiago fully complied with his part of the oral contract between the parties and that this is an action 'lot only for specific performance but also for damages." 'Consequently, the court held that the Statute of Frauds cannot be invoked for the reason that "performance by one party of his part of the contract takes the case out of the statute." And Pursuant to such ruling, when the case was tried on the merits, the court

overruled all ob. jections of counsel for appellants to the introduction, of oral testimony to prove the alleged verbal agreement. The important question then to be determined is whether or not the alleged verbal agreement falls within the prehibition of the Statute of Frauds. This statute, formerly incorporated as Section 21 of Rule 123 of our Rules of Court, is now found in Article 1403 of the new Civil Code, which provides, in so far as pertinent to this case, as follows: "In the following cases an agreement hereafter made shall be unenforceable by action unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent, evidence therefore, of the agreement cannot be received without the writing, or secondary evidence of its contents; "(a) An agreement that by its terms is not to be performed within a year from the making thereof. "(e) An agreementfor the sale of real property or of an interest therein." Appellants contend that the alleged verbal agreement falls under paragraphs (a) and (e) above-quoted because the same may be considered as on agreement which by its terms is not to be performed within one year from the making thereof, or one which involves a sale of real property or of an interest therein. If this premise is correct, appellants contend, then the trial court erred in allowing the introduction of parole evidence to prove the alleged agreement over the vigorous objection of counsel for appellants. That the alleged verbal agreement is one which by its terms is not to be performed within one year is very apparent from the allegations of the complaint. Thus, it is therein alleged that the agreement was allegedly made in 1924 and by its terms Santiago Babao bound himself (1) to improve all the 156 hectares of forest lands by levelling and clearing all the forest trees and planting thereon coconuts, rice, corn and other crops such as bananas and bamboo trees, and (2) to act at the same time as administrator of said land and improvements during the lifetime of Celestina Perez. And in consideration of such undertaking, Celestina Perez "bound herself to give and deliver, either to Santiago Babao or his wife Cleofe Perez, one-half of the whole area of said land as improved with all the improvements thereon upon her death". It is also alleged in the complaint that Celestina Perez died on August 24, 1947, or 23 years after the making of the alleged agreement, while Santiago Babao died on January 6, 1948. From the above terms, therefore, it is not difficult to see that the undertaking assumed by Santiago Babao which was to clear, level and plant to coconut trees and other plants 156 hectares of forest land could not lie accomplished in one year. In fact, the alleged improvements were supposedly accomplished during the lifetime of Celestina, which lasted over a period of 23 years, and even then not all was cleared and planted but only a portion thereof. Another part of his undertaking is that he is to administer the land during the lifetime of Celestina, and as we have already said, her death occurred 23 years after the agreement. But the trial court expressed the view that the statute does not apply because it assumed that Santiago Babao fully complied with his part of the oral contract between the parties, and in its opinion "performance by one party of his part of the contract takes the case out of the statute." Even if this assumption were correct, still we find one flaw in its logic which fully nullifies it for it fails to consider that in order that a partial performance of the contract may take the case out of the operation of the statute, it must appear clear that the full performance has been made by one party within one ' year, as otherwise the statute would apply. Thus, the rule on this point is well stated in Corpus Juris in the following wise: "Contracts which by their terms are not to be performed within one year, may be taken out of the statute through performance by one party thereto. All that is required in such case is complete performance within, the year by one party, however many years may have to elapse before the agreement is performed by the other party. But nothing less than full performance by one party will suffice, and it has been held that, if anything remains to be done after the expiration of the year besides the mere payment of money, the statute will apply," I (Italics supplied). it is not therefore correct to state that Santiago Babao has fully complied with his part within the year from the alleged contract in question. "When, in an oral contract which, by its terms, is not to be performed within one year from the execution thereof, one of the contracting Parties has complied within the year with the obligations imposed on him by said contract, the other Party cannot avoid the fulfillment of those incumbent on him under the same contract by 'This rule was quoted with approval by our Supreme Court in the case of Shoemaker vs. La Tondea, Inc., supra. invoking the statute of frauds because the latter aims to prevent and not to protect fraud." (Shoemaker vs. La Tondea, Inc. 68 Phil., 24.) "The broad view is that the statute of Frauds applies only to agreements not to be performed on either side within a year from the making thereof. Agreements to be fully performed on one side within the year are taken out of the operation of the statute." (National Bank v.s. Philippine Vegetable Oil Co., 49 Phil., 857, 858.) Assuming arguendo that the agreement in question falls also under paragraph (a.) of Article 1403 of the Civil Code, 1. e., it is a contract or agreement for the sale of real property or of an interest therein, 'it cannot also be contended that that provision does not apply to the present case for the reason that there was part perormance on the part of one of the parties. in this connection, it must be noted that this statute is one based on equity. It is based on equitable estoppel or estoppel by conduct. It operates only under certain specified conditions and when adequate relief at law is unavailable (45 Am. Jur., Statute of Frauds, Section 422, p. 727). And one of the requisites that need be present is that the agreement relied on must be certain, definite, clear, unambiguous and unequivocal in its terms before the statute may operate. Thus, the rule on this matter is as follows: "The contract must be fully made and completed in every respect except for the writing required by the statute, in order to be enforceable on the ground of part performance. The parol agreement relied on must be certain, definite, clear, unambiguous, and unequivocal in its terms, particularly where the agreement is between parent

and child, and be clearly established by the evidence. The requisite of clearness and definiteness extends to both the terms and the subject matter of the contract. Also, the oral contract must be fair, reasonable, and just in its provisions for equity to enforce it on the ground of part performance. If it would be inequitable to enforce the oral agreement, or if its specific enforcement would be harsh or oppressive upon the defendant, equity will withhold its aid. Clearly, the doctrine of part performance taking an oral contract out of the statute of frauds does not apply so as to support a suit for specific performance where both the equities and the statute support the defendant's case." (49 Am. Jur., p. 729.) The alleged agreement is far from complying with the above requirement for, according to the complaint, Santiago Babao bound himself to convert a big parcel of forest land of 156 hectares into a veritable farm planted to coconuts, rice, corn and other crops such as bananas and bamboo trees and to act as administrator of said farm during the lifetime of Celestina Perez, while the latter in turn bound herself to give either to Santiago or his wife 1/2 of the land as improved with all the improvements thereon upon her death. This agreement is indeed vague and ambiguous for it does not specify how many hectares was to be planted to coconuts, how many to rice and corn, and what portion to bananas and bamboo trees. And as counsel for appellants puts it, "as the alleged contract stands, if Santiago Babao should plant one-half hectares to coconuts, one-half to rice, and another half hectare to corn, and the rest to bananas and bamboo trees, he would be entitled to receive one-half of 156 hectares, or 78 hectares, of land for his services. That certainly would be unfair and unheard of; no sane property owner would enter into such contract. It costs much more time, money, and labor to plant coconut trees than to plant bananas and bamboo trees; and it also costs less to convert forest land to rice and corn land than to convert it into a coconut plantation. On the part of Celestina Perez, her promise is also incapable of execution. How could she give and deliver one-half of the land upon her death?" The terms of the alleged contract would appear more vague if we consider the testimony of Carlos Orense who claimed to have been present at the time the alleged agreement was made between Celestina Perez and Santiago Babao for apparently the same does not run along the same line as the one claimed by appellee. This is what Orense said: "You, Santiago, leave the Llana estate and attend to this lupang para ng. Have it cleared and planted to coconuts, for that land will eventually fall in your hands" (as translated from Tagalog), which runs counter with the claim of appellee. The agreement being vague and ambiguous, the doctrine ol part, performance cannot therefore be invoked to take this case out of the operation of the statute. "Obviously, there can be no part performance until there is a definite and complete agreement between the parties in order to warrant the specific enforcement c. a parol contract fur 'the sale of land, on the ground of part performance all the essesntial terms of the contract must be established by competent proof, and shown to be definite, certain, clear, and unambiguous. "And this clearness and definiteness must extend to both the terms and theof the contract. "The rule that a court will not specifically enforce a contract for the sale of land unless its terms 'have been definitely understood and agreed upon by the parties, and established. by the evidence, is especially applicable to oral contracts sought to be enforced on the ground of )art. performance. An oral contract, to be enforced on this ground, must at least have that degree of certainty which is required of written contracts sought to be specifically enforced. "The parol contract must be sufficiently clear and definite to render the precise arts which are to be performed thereunder clearly ascertainable. Its terms must be so clear and complete as to allow no reasonable doubt respecting its enforcement according to the understanding of the parties." (101 A. L. R., pp. 950--951) "In this jurisdiction, as in the United States, the existence of an oral agreement or understanding such as that alleged in the complaint in the case at bar cannot be maintained on vague, uncertain, and indefinite testimony, against the reasonable presumption that prudent men who enter into such contracts will execute them in writing, and comply with the formalities prescribed by law for the creation of a valid mortgage. But where the evidence as to the existence of such an understanding or agreement is clear, convincing, and satisfactory, the same broad principles of equity operate in this jurisdiction as in the United States to compel the parties to live up to the terms of their contract." (Cuyugan vs. Santos, 34 Phil., 100, 101.) There is another flaw that we find in the decision of the court a quo. During the trial of this case, counsel for appellants objected the admission of the testimony of plaintiff Bernardo Babao and that of his mother Cleofe Perez as to what occurred between Celestina Perez and Santiago Babaio, with regard to the agreement', on the ground that their testimony was prohibited by section 26(c) of Rule 123 of the Rules of Court.This rule prohibits parties or assignors of parties to a case, or persons in whose behalf a case is prosecuted, against an executor or administrator of- a deceased person upon a claim pr demand against the estate of such deceased person from matter of fact occurring before the testifying as to any matter death of such deceased person. But the trial court overruled the opposition saying that said rule did not apply where the complaint against the estate of a deceased person alleges fraud, citing the case of Ong Chua vs. Carr, 53 Phil., 980. Here again the court is in error because if in that case the witness was allowed to testify it was because the existence of fraud was first established by sufficient and competent evidence. Here, however, the alleged fraud is predicated upon the existence of the agreement itself which violates the rule of petitio principii. Evidently, the fraud to exist must be established by evidence aliunde and not by the same evidence which is to sought to be pre. vented. The infringement of the rule is evident. 41* * ..: The reason for this rule is that 'if death has closed the lips of one party, the policy of the law is to close the lips of the other.' Another reason is that 'the temptation to falsehood and concealment in such cases is considered too great to allow the surviving party to testify in his own behalf.' Accordingly, the incompetency

applies whether the deceased died before or after the commencement of the action against him, if at the time the testimony was given he was dead and cannot disprove it, since the reason for the prohibition, which is to discourage perjury, exists in both instances." (Moran, Comments on the Rules of Court, Vol. 3, 1952 Ed., p. 2104.) Having reached the conclusion that all the parol evidence of appellee was submitted in violation of the Statute of Frauds, or of the rule which prohibits testimony against deceased persons, we find unnecessary to discuss the other issues raised in appellants' brief. Wherefore, the decision appealed from is reversed, and the case is dismissed, with costs against appellee. Paras, C. J., Bengzon, Padilla, Reyes, A., Labrador, Reyes, J. B. L., and Endencia, JJ., concur. Judgment reversed.

[GRN L-70054 July 8, 1986.*] BANCO FILIPINO, petitioner, vs. MONETARY BOARD, ET AL., respondents. RESOLUTION PETITION to review the order of the Regional Trial Court of Makati, Br. 136. The facts are stated in the resolution of the Court. Subject of this "Petition to Set Aside Order to Produce Documents dated 17 February 1986" is the Order of Branch 136, Regional Trial Court, Makati, granting the motion of the petitioner herein, based on Section 1, Rule 27, of the Rules of Court, for the production, inspection, and copying of certain papers and records which are claimed as needed by the Petitioner Bank for the preparation of its comments, objections, and exceptions to the Conservator's report dated January 8, 1985, and Receiver's Report dated March 19, 1985. The documents now asked to be produced, inspected, and copied are the following: (1) Copies of tapes and transcripts of the Monetary Board (MB) deliberations on the closure of Banco Filipino (BF) and its meeting on July 27, 1984, and March 22, 1985; (2) Copies of the letter and reports of first conservator, Mr. Basilio Estanislao, to the MB and to Central Bank Governor Jose Fernandez; (3) Papers showing computations of all the interests and penalties charged by the CB against BF; (4) Schedule of recommended valuation of reserves per Mr. Tiaoqui's report dated March 19, 1985; (5) Adjustment per Annex "C" of Mr. Tiaoqui's report; (6) Annexes "A", "B", and "C" of the joint report of Mr. Tiaoqui, Mr. Aurellano, and Mrs. Valenzuela; (7) Schedule of devaluation of CB-premises of Paseo de Roxas of same report; (8) Schedule of BF's realizable assets from P5,159.44 B to P3,909.23 B as of January 25, 1985; (9) Documents listed in BF's letter to Mrs. Carlota Valenzuela dated October 25, 1985. In issuing the challenged order, the court below took the view that the Supreme Court's resolution referring to it the matters relative to the bank's closure does not preclude the petitioner from availing of this mode of discovery as an additional means of preparing for the hearing. It considered the documents sought to be produced as not privileged because these constitute or contain evidence material to the issues into by the Court. These materials are said to comprise of records of the administrative proceedings conducted by respondent's officials and representatives from the inception of and preparation of the challenged reports and the resolution placing petitioner under receivership and thereafter under liquidation as it is the regularity and impartiality of these administrative proceedings which are being assailed by the petitioner, the trial court saw no reason why said documents should be thus concealed from it. Respondents Monetary Board and Central Bank take exception to the said order and pray in their petition before this Court for the reversal and setting aside of the same. The grounds recited in support of their petition are the following: (1) The ratiocination of the trial court is wholly in error because the proceedings before it do not at all deal with either the administrative proceedings conducted by the respondents or the regularity and impartiality of the CB actions on BF; it does so simply upon the charge that no "hearing" was given BF prior to those actions of closure and liquidation. However, no such prior hearing had been called as none is required by the law and by the Supreme Court decisions in force to this date (Rural Bank of Lucena, Inc. vs. Arca, 15 SCRA 66, and Rural Bank of Bato vs. IAC, G.R. 65642, Oct. 15, 1984). (2) The tapes and transcripts of the Monetary Board deliberations are confidential pursuant to Sections 13 and 15 of the Central Bank Act. "Sec. 13. Withdrawal of persons having a personal interest .-Whenever any member attending a meeting of the Monetary Board has a material personal interest, directly or indirectly, in the discussion or resolution of any given matter, said member shall not participate in the discussion or resolution of the matter and must retire from the meeting during the deliberation thereon. The subject matter, when resolved, and the fact that a member had a personal interest in it, shall be made available to the public. The minutes of the meeting shall note the withdrawal of the member concerned. (As amended by PD No. 1827). "Sec. 15. Responsibility. -Any member of the Monetary Board or officer or employee of the Central Bank who wilfully violates this Act or who is guilty of gross negligence in the performance of his duties shall be held liable for any loss or injury suffered by the Bank as a result of such violation or negligence. Similar responsibility shall

apply to the disclosure of any information of a confidential nature about the discussion or resolutions of the Monetary Board except as required in Section 13 of this Act or about the operations of the Bank, and to the use of such information for personal gain or to the detriment of the Government, the Bank or third parties. (As amended by Presidential Decree No. 72). (Italics supplied). (3) The Monetary Board deliberations were necessarily held subsequent to the submission of the CB reports. They did not enter into the making of those reports and can have no materiality to any question of fact that may be raised in relation to their contents. On April 16,1986, Petitioner Banco Filipino filed its Comment on Respondent's petition to set aside the order for the production of the documents. In said pleading, the petitioner bank assails the respondent's petition on the following grounds: (1) There is no reason why Banco Filipino should not be furnished the documents, particularly Nos. 3 to 9 of its motion, when these are merely attachments to the Supervision and Examination Sector, Dept. II (SES) Reports, copies of which were given to it pursuant to a Supreme Court order. (2) The Supreme Court in its referral of October 8, 1985 to the RTC Makati intended full evidence taking of the proceeding for judicial review of administrative action filed with the Supreme Court, the trial court being better equipped for evidence taking. (3) The respondents cannot claim privilege in refusing to produce the Central Bank records because it is based only on the generalized interest in confidentiality. Petitioner cites as a precedent the doctrine established in the case of U.S. vs. Nixon, 418 U.S. 683, 713, which states that "when the ground for asserting privilege as to subpoenaed materials sought for use in a criminal case is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law." (4) The requested documents and records of the Central Bank are material and relevant because BF is entitled to prove from the CB records (a) that Governor Fernandez closed BF without a MB resolution and without examiner's reports on the financial position of BF; (b) that a MB resolution was later made to legalize the BF closure but it had no supporting examiner's report; (c) that the earlier reports did not satisfy respondent Governor Fernandez and he ordered the examiners and the conservator, Gilberto Teodoro, to "improve" them; and (d) that the reports were then fabricated. Petitioner adds that what respondents fear is disclosure of their proceedings because petitioner has accused the CB governor of (a) covering 51% of its stockholding, (b) encashing BF securities in trickles as fuel a run, (c) appointing a conservator when the President ordered the MB to grant petitioner a P3 Billion credit line, (d) replacing Estanislao with Gilberto Teodoro when the former wanted to resume normal operations of BF, and (e) changing the conservatorship to receivership when it appointed Carlota Valenzuela as receiver again without hearing. On May 13, 1986, Respondent Monetary Board filed their Reply to Petitioner Bank's Comment dated April 15, 1986. Respondents argue that: (1) The case of U.S. vs. Nixon and the other decisions cited by petitioner are inapplicable because a) The authorities cited refer only to a claim of privilege based only on the generalized interest of confidentiality or on an executive privilege that is merely presumptive. On the other hand, the so-called MB deliberations are privileged communications pursuant to Section 21, Rule 130 of the Rules of Court because statements and opinions expressed in the deliberation of the members of the MB are specifically vested with confidentiality under Secs. 13 and 15 of the Central Bank Act. The "public interest" requirement for nondisclosure is evident from the fact that the statute punishes any disclosure of such deliberations. b) Petitioner has not in the least shown any relevance or need to produce the alleged MB deliberations. What petitioner intends to prove are not "issues" raised in the pleadings of the main petition. (2) Petitioner is interested, not in discovering evidence, but in practicing oppression by the forced publication of the MB members' confidential statements at board meetings. (3) The so-called deliberations of the Monetary Board are in truth merely the individual statements and expressions of opinion of its members. They are not statements or opinions that can be imputed to the board itself or to the Central Bank. The transcripts of stenographic notes on the deliberations of the MB are not official records of the CB; they are taken merely to assist the Secretary of the MB in the preparation of the minutes of the meetings. And as advertedly also, the tape recordings are not available as these are used over and over again. The motion for the production of the subject documents was filed by petitioner pursuant to Section 1, Rule 27, of the Rules of Court. It has been held that "a party is ordinarily entitled to the production of books, documents and papers which are material and relevant to the establishment of his cause of action or defense" (General Electric Co. vs. Superior Court in and for Alameda County, 45 C. 2d 879, cited in Martin, Rules of Court, 3rd edition, Vol. 2, p. 104). "The test to be applied by the trial judge in determining the relevancy of documents and the sufficiency of their description is one of reasonableness and practicability" (Line Corp. of the Philippines vs. Moran, 59 Phil. 176, 180). "On the ground of public policy, the rules providing for production and inspection of books and papers do not authorize the production or inspection of privileged matter, that is, books, papers which because of their confidential and privileged character could not be received in evidence" (27) CJS 224). "In passing on a motion for discovery of documents, the courts should be liberal in determining whether or not documents are relevant to the subject matter of action" (Hercules Powder Co. vs. Haas Co., U.S. Dist. Ct. Oct. 26, 1944, 9 Fed. Rules Service, 659, cited in Moran, Comments on the Rules of Court, 1979 Ed. Vol. 2, p. 102). Likewise, "any statute declaring in general terms that official records are confidential should be liberally

construed, to have an implied exception for disclosure when needed in a court of justice" (Wigmore on Evidence, Vol. VIII, p. 801, citing the case of Marbury vs. Madison, 1 Cr. 137,143). In the light of the jurisprudence above-cited, this Court holds that no grave abuse of discretion was committed by the court below in granting petitioner's motion for the production of the documents enumerated herein. We accept the view taken by the court below that the documents are not privileged and that these constitute or contain evidence material to the issues being inquired into by the Court. With respect to Items Nos. 3 to 9, these are the annexes to the Supervision and Examination Sector, Dept. II (SES) Reports submitted to the Central Bank and Monetary Board which were taken into consideration by said respondents in closing petitioner bank. A copy of the SES Reports was furnished to the petitioner. We, therefore, fail to see any proper reason why the annexes thereto should be withheld. Petitioner cannot adequately study and properly analyze the report without the corresponding annexes. Pertinent and relevant, these could be useful and even necessary to the preparation by petitioner of its comment, objections and exceptions to the Conservator's reports and receiver's reports. Regarding copies of the letter and reports of first Conservator, Mr. Basilio Estanislao, to the Monetary Board and to Central Bank Governor Fernandez (Item No. 2) these appear relevant as petitioner has asserted that the above-named Conservator had in fact wanted to resume normal operations of Banco Filipino but then he was thereafter replaced by Mr. Gilberto Teodoro. The letter and reports could be favorable or adverse to the case of petitioner but whatever the result may be, petitioner should be allowed to photocopy the same. As to the tapes and transcripts of the Monetary Board deliberations on the closure of Banco Filipino and its meetings on July 27, 1984, and March 22, 1985, (Item No. 1), respondents contend that "it is obvious from the requirement (Sections 13 and 15 of the Central Bank Act) that the subject matter (of the deliberations), when resolved . . . shall be made available to the public but the deliberations themselves are not open to disclosure but are to be kept in confidence." This Court, however, sees it in a different light. The deliberations may be confidential but not necessarily absolute and privileged. There is no specific provision in the Central Bank Act, even in Sections 13 and 15 thereof, which prohibits absolutely the courts from conducting an inquiry on said deliberations when these are relevant or material to a matter subject of a suit pending before it. The disclosure is here not intended to obtain information for personal gain. There is no indication that such disclosure would cause detriment to the government, to the bank or to third parties. Significantly, it is the bank itself here that is interested in obtaining what it considers as information useful and indispensably needed by it to support its position in the matter being inquired to by the court below. On the other hand, respondents cite Section 21, Rule 130, Rules of Court which states: "Section 21. Privileged Communications.-The following persons cannot testify as to matters learned in confidence in the following cases: xxxxxxxxxxx (e) A public officer cannot be examined during his term of office or afterwards, as to communications made to him in official confidence, when the court finds that the public interest would suffer by disclosure. " But this privilege, as this Court notes, is intended not for the protection of public officers but for the protection of public interest (Vogel vs. Gruaz, 110 U.S. 311 cited in Moran, Comments on the Rules of Court, 1980 Ed. Vol. 5, p. 2,11). Where there is no public interest that would be prejudiced, this invoked rule will not be applicable. "The rule that a public officer cannot be examined as to communications made to him in official confidence does not apply when there is nothing to show that the public interest would suffer by the disclosure question. x x x". (Agnew vs. Agnew, 52 SD 472, cited in Martin Rules of Court of the Philippines, Third Edition, Vol. 5, p. 199). In the case at bar, the respondents have not established that public interest would suffer by the disclosure of the papers and documents sought by petitioner. Considering that petitioner bank was already closed as of January 25, 1985, any disclosure of the aforementioned letters, reports, and transcripts at this time pose no danger or peril to our economy. Neither will it trigger any bank run nor compromise state secrets. Respondent's reason for their resistance to the order of production are tenuous and specious. If the respondents public officials acted rightfully and prudently in the performance of their duties, there should be nothing at all that would provoke fear of disclosure. On the contrary, public interests will be best served by the disclosure of the documents. Not only the banks and its employees but also its numerous depositors and creditors are entitled to be informed as to whether or not there was a valid and legal justification for the petitioner's bank closure. It will be well to consider that: "Public interest means more than a mere curiosity; it means something in which the public, the community at large, has some pecuniary interest by which their legal rights or liabilities are affected" (State vs. Crocket, 206, p. 816 cited in Words and Phrases, Vol. 35, p. 229). IN VIEW OF ALL THE FOREGOING, the order to produce documents dated February 17, 1986 issued by the court below in S.C.-G.R. No. 70054, is hereby affirmed, except as to the copies of the tapes relative to the Monetary Board deliberations on the closure of Banco Filipino on January 25, 1985 and its meetings on July 27, 1984, and March 22, 1985 and only if such tapes are actually no longer available taking into account respondent Monetary Board's manifestations that the tape recording of the deliberations of that Board are, for purposes of economy, used over and over again inasmuch as these tapes are not required to be kept or stored. (See Respondent's Reply, dated May 12, 1986; Rollo, Vol. IV, pp. 1288-1289). SO ORDERED. Gutierrez, Jr., J., took no part. Order affirmed.