EVIDENCE | B2015 CASE DIGESTS
Goni v. CA September 23,1986 Fernan, J. sai
SUMM SUMMAR ARY: Y: Villa Villanue nueva va wante wanted d to buy the 3 hacien haciendas das owned owned by TABACL TABACLERA ERA but since since he had had no suffic sufficien ientt funds, funds, he offere offered d the hacienda haciendass to Villegas Villegas with Vicente Vicente as guaranto guarantor. r. The aount reali!ed reali!ed fro this transaction was still not enough so he entered into a "roise to sell 3 lots of one of the haciendas with Vicente. #ubse$uently, % of the 3 lots &lot nos ' and (3) were sub*ect of a lease to Vicente for + years. hen Villanueva died, the inventory included the 3 lots in $uestion. Vicente instituted an action for recovery of "ro"erty and daages against heirs and -oni, the adinistrator. TC and CA ruled in favor of Vicente. #C reversed this ruling stating that Vicente should surrender the lots to the heirs and "ay corres"onding annual rent for the fields. DOCTRINE: is$ualification is$ualification by reason of interest is anchored on #ection %/&a) of Rule (3/, coonly 0nown as the #urvivorshi" is$ualification is$ualification Rule or ead 1an #tatute. The ob*ect and "ur"ose of the rule is to guard against the te"tation to give false testiony in regard to the transaction in $uestion on the "art of the surviving "arty and further to "ut the two "arties to a suit u"on ters of e$uality in regard to the o""ortunity of giving testiony. 2t is designed to close the li"s of the "arty "laintiff when death has closed the li"s of the "arty defendant, in order to reove fro the surviving "arty the te"tation to falsehood and the "ossibility of fictitious clais against the deceased. But in this case, such "rovision is ina""licable since such "rotection was effectively waived when waived when counsel for "etitioners cross e4ained Vicente. Vicente. 5A waiver occurs when "laintiff6s de"osition is ta0en by the re"resentative of the estate or when counsel for the re"resentative crosse4ained crosse4ained the "laintiff as to atters occurring during deceased6s lifetie FACTS: Co"ania -eneral de Tabacos de 7ili"inas &TABACLERA) owned 3 haciendas 0nown as #an #ebastian, #arria and ulce 8obre de 1aria in Bais, 8egros 9ccidental. :ra4edes Villanueva wanted to but the haciendas
but did not have sufficient funds to "ay the "rice so, with the consent of TABACLERA TABACLERA,, he offered offered the haciend haciendas as to #antiago #antiago Villegas, Villegas, later later substituted by ;oa$uin Villegas. -as"ar Vicente stood as the guarantor in a docuent
aoun aountt reali! reali!ed ed fro fro the transa transacti ction on betwe between en Ville Villega gass and Villanueva was not enough so Villanueva contracted or "roised to sell fields no. 3, ', (3 of >acienda ulce 8obre for :(3,?/@ to Vicente. The aount of :(%,'/.%' was the aount debited fro Vicente since it was the aount needed to co"lete the "urchase "rice. Villanueva was able to raise funders by selling a "ro"erty in Ayungon 8egros 9ccidental so he went to Vicente to rescind the contract"roise to sell but since the aount was already debited, this was not "ossible. They agreed that lots ' and (3 would be leased to Vincent for + years starting (+/(+( at annual rental of (+D of the gross incoe, rent to be deducted fro oney advanced by Vicente.
2n
(', TABACLERA e4ecuted foral deed of sale of the 3 haciendas in favor of Villanueva, including fields 3,',and (3 which were registered in the latters nae. These fields fields were were ortgage ortgaged d to the Rehailitation Rehailitation and 7inance 7inance Cor"oration Cor"oration later later transferr transferred ed to :8B for total total indebted indebtedness ness of :33',' :33','// //.. 1eanw 1eanwhil hile, e, fields fields 3 and and (3 were deliv delivere ered d to Vicen Vicente. te. Villanueva additionally e4ecuted a <ocuento de la Venta efinitive= in favor of Villegas covering Lot 3(' of >acienda #arria. 2n (+(, (+(, Villa Villanue nueva va died. died. 2nclu 2nclude ded d in the invent inventory ory for intest intestate ate "roceedings "roceedings were fields nos. 3 and ' &listed as lot %+@ %+@ of inventory) and (3 &listed as lot no. @%3). Vicente instituted an action for recovery of "ro"erty and daages against -oni in his ca"acity as adinistrator of the estate. Vicente sought to recover field no. 3 by virtue of the contract"roise to sell. -onie filed an answer with counterclai for accounting of the "roduce of fields ' and (3 and surrender thereof at the end of the + th cro" year in (++ "lus oral daages, atty. fees. Vicente filed an aended co"laint to include include a "rayer "rayer for daages daages re"resen re"resenting ting "roduce "roduce of field no. 3 until until delivery thereof to hi. >e later aended to include as "artiesdefendants heirs of Villanueva. Villanueva. The "arties entered into a sti"ulation of facts agreeing on the costs of "roducti "roduction on and "roduce "roduce of the 3 fields. fields. There There were two witnesses witnesses for VicenteF Vicente hiself who testified on the facts occurring before the
EVIDENCE | B2015 CASE DIGESTS
death of Villanueva and E"ifanio E$uio a cler0 of TABACLERA Agency 2 Bais #ugar Central. efendants on the other hand "resented -9ni who testified on the alleged verbal lease agreeent. TC *udgent in favor of Vicente, that the heirs should deliver filed no. 3 to the forer and to e4ecute a foral deed of sale covering the 3 fields. 2t ordered the heirs to "ay Vicente actual or co"ensatory daages :?(,%/' which was (+D of the total gross incoe of field 3 for cro" years (+/+( to (+?+. Both "arties a""ealed CA affired TC decision with odification on the aount of daages which should be total net incoe fro filed 3 fro (+/+( until the field is delivered to Vicente. ISSUES AND RUING: !."REE#ANT$ %ON Ga&'a( #icente )ay te&tify on )atte(& of fact occ*((in+ ,efo(e t-e deat- of #illan*eva w-ic- con&tit*te& a clai) o( de)and *'on -i& e&tate in violation of R*le !/ Sec. 0/ 'a(a+(a'- A1 YES2 Gnder ordinary circustances, Vicente would be dis$ualified by reason of interest fro testifying as to any atter of fact occurring before the death of Villanueva, such dis$ualification being anchored on #ection %/&a) of Rule (3/, coonly 0nown as the #urvivorshi" is$ualification Rule or ead 1an #tatute. The ob*ect and "ur"ose of the rule is to guard against the te"tation to give false testiony in regard to the transaction in $uestion on the "art of the surviving "arty and further to "ut the two "arties to a suit u"on ters of e$uality in regard to the o""ortunity of giving testiony. 2t is designed to close the li"s of the "arty "laintiff when death has closed the li"s of the "arty defendant, in order to reove fro the surviving "arty the te"tation to falsehood and the "ossibility of fictitious clais against the deceased. This case reains within the abit of the "rotection because the defendantsheirs are "ro"erly the 5re"resentatives5 of the deceased, not only because they succeeded to the decedent6s right by descent or o"eration of law, but ore i"ortantly because they are so "laced in litigation that they are called on to defend which they have obtained fro the deceased and a0e the defense which the deceased ight have ade if living, or to
establish a clai which deceased ight have been interested to establish, if living. #uch "rotection, however, was effectively waived when counsel for "etitioners crosse4ained Vicente. 5A waiver occurs when "laintiff6s de"osition is ta0en by the re"resentative of the estate or when counsel for the re"resentative crosse4ained the "laintiff as to atters occurring during deceased6s lifetie. Also, the heirs "resented a counterclai against Vicente. hen Vicente thus too0 the witness stand, it was in a dual ca"acity as "laintiff in the action for recovery of "ro"erty and as defendant in the counterclai for accounting and surrender of fields nos. ' and (3. Evidently, as defendant in the counterclai, he was not dis$ualified fro testifying as to atters of fact occurring before the death of Villanueva, said action not having been brought against, but by the estate or re"resentatives of the estatedeceased "erson. Li0ewise, under a great a*ority of statutes, the adverse "arty is co"etent to testify to transactions or counications with the deceased or inco"etent "erson which were ade with an agent of such "erson in cases in which the agent is still alive and co"etent to testify. But the testiony of the adverse "arty ust be confined to those transactions or counications which were had with the agent. The contract"roise to sell under consideration was signed by "etitioner -oHi as attorneyin fact of Villanueva. >e was "rivy to the circustances surrounding the e4ecution of such contract and therefore could either confir or deny any allegations ade by Vicente with res"ect to said contract. The ine$uality or in*ustice sought to be avoided by #ection %/&a) of Rule (3/, where one of the "arties no longer has the o""ortunity to either confir or rebut the testiony of the other because death has "eranently sealed the forer6s li"s, does not actually e4ist in the case at bar, for the reason that -oHi could and did not negate the binding effect of the contract"roise to sell. Thus, while aditting the e4istence of the said contract"roise to sell, -oHi testified that the sae was subse$uently novated into a verbal contract of lease over fields nos. ' and (3 of the >acienda ulce 8obre de 1aria 0. %ON t-e w(itten '(o)i&e to &ell w a& novated into a ve(,al a+(ee)ent of lea&e d*(in+ t-e lifeti)e of #illan*eva3 YES2 8ovation ta0es "lace when the ob*ect or "rinci"al condition of an obligation is changed or altered. 58ovation is never "resued. 2t ust be established that the old and the new contracts are inco"atible in all "oints, or that the
EVIDENCE | B2015 CASE DIGESTS
will to novate a""ear by e4"ress agreeent of the "arties or in acts of e$uivalent i"ort. The novation of the written contract"roise to sell into a verbal agreeent of lease was clearly and convincingly "roven not only by the testiony of "etitioner -oHi, but li0ewise by the acts and conduct of the "arties subse$uent to the e4ecution of the contract"roise to sell. Thus, after the illing season of cro" year ('+/, only fields nos. ' and (3 were delivered to Vicente. 7ields nos. 3, ' and (3 were subse$uently registered in Villanueva6s nae and ortgaged with the R7C. Villanueva li0ewise e4ecuted a deed of sale covering >acienda #arria in favor of ; oa$uin Villegas. All these were 0nown to Vicente, yet he did not ta0e any ste"s toward "rotecting his clai over fields nos. 3, ' and (3 either by deanding during the lifetie of Villanueva that the latter e4ecute a siilar docuent in his favor, or causing notice of his adverse clai to be annotated on the certificate of title of said lots. 2f it were true that he ade deands on Villanueva for the surrender of field no. 3 as well as the e4ecution of the corres"onding deed of sale, he should have, u"on refusal of the latter to do so, iediately or within a reasonable tie thereafter, instituted an action for recovery, or caused his adverse clai to be annotated on the certificate of title. Considering that field no. 3, containing an area of 3 hectares, @+ ares and / centares, is the biggest aong the 3 lots, an ordinary "rudent an would have ta0en these ste"s if he honestly believed he had any right thereto. Vicente did neither. 2n fact such inaction "ersisted even during the "endency of the intestate "roceedings wherein he could have readily intervened to see0 e4clusion of fields nos. 3, ' and (3 fro the inventory of "ro"erties. The e4"lanation of Vicente that there were sall sugar cane growing on field 3 ay be "lausible e4"lanation why he could not ta0e iediate "ossession, but it certainly could not e4"lain why it too0 hi ' years before instituting an action in court. TC and CA believed ore in the "roise to sell than the lease agreeent si"ly because the forer had been reduced to writing, while the latter was erely verbal. 2t ust be observed, though, that the contract"roise to sell was signed by "etitioner -oHi as attorneyinfact of Villanueva, an indication that final arrangeents were ade by -oHi in the absence of Villanueva. 2t was therefore natural for Vicente to have deanded that the agreeent be in writing to erase any doubt of its binding effect u"on
Villanueva. 9n the other hand, the verbal lease agreeent was negotiated by and between Villanueva and Vicente. Being close friends and relatives it can be safely assued that they did not find it necessary to reduce the sae into writing. Also, it was stated by the C A that -oni, as a sugar "lanter had full 0nowledge as to annual incoe of lots ' and (3 and since there was the aount of :(%'/.%+ to be li$uidated, -onie never deeed it wise to deand a yearly accounting. 2t was only after the e4"iration of the + year lease that -oni deanded accounting of the "roduction of the % lots leased to Vicente. 2t is the custo aong the sugar "lanters in the locality that the Lessee usually deands an advance aount to cover the rental for the "eriod of the lease, and the deand of an accounting will be only ade after the e4"iration of the lease "eriod. 2t was adduced during the trial that the aount of :(%,'/.@+ was considered as an advance rental of the % lots which was leased to Vicente lots nos. ' and (3I so there was no necessity on the "art of to a0e a yearly deand for an accounting for the total "roduction of % "arcels leased. -oni and >eirs having clearly and sufficiently shown that the contract"roise to sell was subse$uently novated into a verbal lease agreeent, it follows that they are entitled to a favorable decision on their counterclai.
DIS4OSITI#E: *udicial adinistrator of the estate of "rivate res"ondent -as"ar Vicente andor his successorsininterest are hereby ordered toF a) surrender "ossession of fields nos. ' and (3 of the >acienda ulce 8obre de 1aria to "etitionersI b) render an accounting of the "roduce of said fields for the "eriod beginning cro"year (+/+( until co"lete "ossession thereof shall have been delivered to "etitionersI and c) to "ay the corres"onding annual rent for the said fields in an aount e$uivalent to (+D of the gross "roduce of said fields, for the "eriods beginning cro"year (+/+( until said fields shall have been surrendered to "etitioners, deducting fro the aount due "etitioners the su of :(%,'/.%' advanced by "rivate res"ondent -as"ar Vicente.
