G.R. No. 160855 - Gaw vs. Chua

Spouses Chua Chin and Chan Chi founded three enterprises: Hagonoy Lumber, Capitol Sawmill Corporation, and Columbia Wood Industries; they had seven children, including petitioner Concepcion Chua (née Chua) and respondent Suy Ben Chua.
On June 19, 1986, Chua Chin died; heirs executed on December 8, 1986 a Deed of Extrajudicial Partition and Renunciation of Hereditary Rights, allocating one-half of Hagonoy Lumber to surviving spouse Chan Chi and the other half in equal P25,967.00 shares among Chan Chi and the seven children, then renouncing these interests in favor of co-heir Chua Sioc Huan.

In May 1988, petitioner and her husband Antonio Gaw requested and received from respondent Suy Ben Chua a P200,000.00 loan evidenced by China Banking Corporation Check No. 240810 dated June 7, 1988, payable in six months without interest; Antonio cashed the check.
On August 1, 1990, Chua Sioc Huan sold all her rights in Hagonoy Lumber to respondent for P255,000.00 in cash, evidenced by a notarized Deed of Sale.

The Gaws failed to repay; respondent sent a demand letter on March 25, 1991, then filed a Complaint for Sum of Money before the RTC alleging a loan of P200,000.00 with six-month maturity.
In their Answer with Counterclaim, the spouses contended the P200,000.00 was petitioner’s advance share in Hagonoy Lumber profits, not a loan, and sought an accounting and delivery of her one-sixth share (estimated ≥P500,000.00). Respondent denied any hereditary interest and insisted on the loan characterization.

Respondent testified as adverse witness, detailing the partition, sale deeds, and his ownership of the lumber business and lots. Petitioner admitted signing the Deed of Partition but claimed the transfer was temporary without further documentary support.
On February 11, 2000, the RTC rendered judgment: petitioner must pay P200,000.00 with interest, P50,000.00 attorneys’ fees, and costs; counterclaim dismissed for lack of merit, upholding the loan nature of the transaction and the validity of the Partition and Sale deeds.
On May 23, 2003, the Court of Appeals affirmed; it ruled that respondent’s adverse-witness testimony did not prejudice petitioner, and that the unchallenged, notarized copies of the deeds sufficed under the best evidence rule exceptions. The CA denied reconsideration on December 2, 2003.
Petitioner filed a petition for review on certiorari before the Supreme Court, challenging (a) the adverse-witness testimony treatment, (b) characterization of the P200,000.00, and (c) admissibility of deed copies under the best evidence rule.

Whether the P200,000.00 check of June 7, 1988 constituted a loan or an advance of petitioner’s share in Hagonoy Lumber profits.
Whether the RTC erred in treating respondent’s testimony as an adverse witness under Rule 132, Section 10, as part of petitioner’s evidence.
Whether the RTC violated the best evidence rule by admitting mere copies of the Deed of Extrajudicial Partition and Deed of Sale without the originals.