Case Summary (G.R. No. 160855)
Loan Agreement and Check Delivery
In May 1988, petitioner and her husband requested a P200,000 loan from respondent for house construction in Marilao. Respondent agreed to an interest-free loan payable in six months and issued China Banking Corporation Check No. 240810 for P200,000 on June 7, 1988, which Antonio Gaw later encashed.
Partition and Sale of Hagonoy Lumber
On December 8, 1986, all heirs executed an Extrajudicial Deed of Partition and Renunciation: one-half of Hagonoy Lumber went to Chan Chi as conjugal share, the remaining half was divided pro indiviso among Chan Chi and the seven children. Six heirs, including Chan Chi, renounced their shares in favor of sister Chua Sioc Huan, making her sole owner. On August 1, 1990, Chua Sioc Huan sold her interest to respondent for P255,000.
Trial Court Proceedings and Decision
After petitioner and her husband defaulted, respondent filed a Complaint for Sum of Money in RTC. The spouses Gaw counterclaimed, alleging the P200,000 was petitioner’s profit share from Hagonoy Lumber, not a loan. The RTC, on February 11, 2000, found it a bona fide loan, ordered petitioner to pay P200,000 plus legal interest, P50,000 attorney’s fees, and costs, and dismissed the counterclaim.
Court of Appeals Ruling
The CA on May 23, 2003 affirmed the RTC. It held (1) respondent’s testimony as adverse witness was properly admitted and did not prejudice petitioner; (2) petitioner admitted the due execution of the Deed of Partition and did not genuinely dispute the Deed of Sale; and (3) petitioner failed to prove her right to accounting or delivery of any hereditary share in Hagonoy Lumber.
Issues on Adverse Witness Testimony
Petitioner argued that testimony elicited during her cross-examination of respondent as an adverse witness should not bind her. The Supreme Court found any error harmless: the classification of evidence between parties does not affect the preponderance-of-evidence determination, and the court must consider all evidence regardless of who offered it.
Application of Preponderance of Evidence Standard
Civil cases require proof by preponderance. Although Rule 132 allows impeachment of an adverse witness, the calling party may still rely on that witness’s unrebutted testimony. The Court stressed that all evidence must be weighed in totality to determine which version is more credible.
Impeachment and Binding Effect of Adverse Witness Testimony
Under Rule 132, the calling party may impeach an adverse witness but remains bound by uncontradicted testimony. Petitioner neither impeached respondent’s statements regarding ownership transfers nor presented countervailing evidence, thereby strengthening respondent’s narrative on the events and deeds.
Ownership of Hagonoy Lumber and Applicability of Partition and Sale Deeds
Because petitioner signed the 1986 Deed of Partition renouncing any hereditary claim, she ceased to hold interest in Hagonoy Lumber. Respondent only became owner after purchasing from Chua Sioc Huan in 1990. At the time of the P200,000 check delivery, neither petitioner nor respondent held any share in the business.
Best Evidence Rule and Admissibility of Documents
The best evidence rule applies when the content of a document is directly in issue. Here, the deeds’ execution and existence were und
...continue readingCase Syllabus (G.R. No. 160855)
Parties and Business Antecedents
- Petitioner: Concepcion Chua Gaw; Respondents: Suy Ben Chua and Felisa Chua.
- Founders of three family enterprises: Hagonoy Lumber, Capitol Sawmill Corporation, Columbia Wood Industries.
- Original owners: spouses Chua Chin and Chan Chi, both Chinese citizens, with seven children: Santos, Concepcion, Suy Ben, Suy Phen, Sioc Huan, Suy Lu, and Julita.
- Death of Chua Chin on June 19, 1986; Hagonoy Lumber’s net worth then ₱415,487.20.
Extrajudicial Partition and Renunciation (December 8, 1986)
- Heirs executed Deed of Extra-Judicial Partition and Renunciation of Hereditary Rights.
- Division of Hagonoy Lumber: one half to surviving spouse Chan Chi; the other half (₱207,743.60) pro indiviso among Chan Chi and seven children (₱25,967.00 each).
- Chan Chi and six children voluntarily renounced their shares in favor of co-heir Chua Sioc Huan.
Loan Transaction Between Parties (May–June 1988)
- In May 1988, petitioner and her husband Antonio Gaw requested a ₱200,000.00 loan from respondent Suy Ben Chua for house construction in Marilao, Bulacan.
- Agreement: repayable within six months, no interest.
- On June 7, 1988, respondent issued China Banking Corporation Check No. 240810 for ₱200,000.00, delivered to the Gaws’ Marilao residence; Antonio encashed the check.
Sale of Hagonoy Lumber to Respondent (August 1, 1990)
- On August 1, 1990, Chua Sioc Huan executed Deed of Sale of all her rights and interests in Hagonoy Lumber to respondent for ₱255,000.00, paid in cash.
Demand and Filing of Complaint (1991)
- Spouses Gaw failed to repay within six-month term.
- Respondent sent demand letter dated March 25, 1991, warning of legal action if unpaid.
- Upon nonpayment, respondent filed Complaint for Sum of Money in the Regional Trial Court (RTC), alleging a ₱200,000.00 loan made on June 7, 1988, unpaid despite demands.
Defendants’ Counterclaims and Pleadings
- Initial Answer with Compulsory Counterclaim: claimed the ₱200,000.00 was petitioner’s share in Hagonoy Lumber profits, not a loan; alleged respondent persuaded delay of accounting to avoid offending their mother.
- Respondent’s Reply: denied any right of the Gaws to accounting; insisted on loan characterization.
- Amended Counterclaim (with leave of court): insisted petitioner, as compulsory heir, entitled to one-sixth share of Hagonoy Lumber (worth at least ₱500,000.00); prayed for accounting and delivery of share.
- Respondent’s further Reply: explained acquisit