G.R. No. L-38972 - Vda. de Mapa vs. Court of Appeals

The plaintiff and appellant is Uy Chico.
The defendants and appellees include The Union Life Assurance Society, Limited.
The action is an appeal from a judgment dismissing the complaint on the merits.
The plaintiff seeks to recover the face value of two insurance policies insuring a stock of dry goods destroyed by fire.

The plaintiff’s father died in 1897, having operated a business under the name “Uy Layco.”
Plaintiff and his brother took over the business under the same name.
Plaintiff purchased his brother’s interest prior to the fire and continued the business under the father’s name.
At the time of the fire, “Uy Layco” was heavily indebted.
Creditors petitioned for the appointment of an administrator of the father’s estate.

Plaintiff’s attorney surrendered the insurance policies to the estate administrator.
The administrator compromised with the insurance company for one-half the face value (P6,000).
The compromised sum was paid into court, held by the sheriff.

Plaintiff claims the policies and insured goods belonged to him, not to the estate, and thus he is not bound by the administrator’s compromise.
Defendant maintains the plaintiff agreed to the compromise.
Evidence introduced showed the plaintiff’s attorney surrendered policies with the understanding of a compromise.
Plaintiff initially waived attorney-client privilege regarding surrender of policies but later withdrew this waiver.
Plaintiff’s counsel argued on appeal that waiver of privilege could be withdrawn before testimony was acted upon, citing foreign cases.

The court examined whether the evidence about the attorney’s dealings was privileged.
The Philippine Practice Act prohibits lawyers from testifying to confidential communications with clients except with client’s consent in open court.
The court distinguished communications intended to be disclosed to third parties from privileged attorney-client communications.
The attorney had acted as an intermediary to a third party (the administrator), thus the communication lost its privileged character.
The court cited multiple foreign cases that rejected objections to attorney’s testimony about compromises made on behalf of clients.

Whether the plaintiff is bound by the compromise settlement of insurance policies effected by the administrator of the estate of the plaintiff’s deceased father.
Whether the testimony of the plaintiff’s attorney regarding the surrender of policies and understanding of compromise was privileged and thus improperly admitted.
Whether a waiver of attorney-client privilege once given can be withdrawn before the testimony is acted upon.