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CONCEPCION CHUA GAW v. SUY BEN CHUA and FELISA CHUA

FACTS:

The case involves a Complaint for Sum of Money filed by the respondent against the spouses Gaw. The respondent alleged that he extended a loan of P200,000 to the spouses, but they failed to pay their obligation despite several demands. The spouses, on the other hand, claimed that the amount was not a loan but the petitioner's share in the profits of Hagonoy Lumber, one of her family's businesses. In their counterclaim, the spouses also asserted that the petitioner, as one of the heirs, is entitled to one-sixth share in the Hagonoy Lumber, which the respondent allegedly took for himself. The respondent countered that the amount was indeed a loan and not the petitioner's share in the business. He claimed to have acquired sole ownership of Hagonoy Lumber through a Deed of Sale with his sister, Chua Sioc Huan. The spouses disputed the validity of the documents presented by the respondent and argued that they do not express the real intention of the parties. During trial, the respondent testified that Hagonoy Lumber was the conjugal property of his parents and that his father initially leased the lots where Hagonoy Lumber is located.

The case involves a dispute between Concepcion Chua Gaw (petitioner) and Antonio Gaw (respondent) over the ownership and management of Hagonoy Lumber. Respondent claimed that he is the owner of Hagonoy Lumber, which was acquired from his sister, Chua Sioc Huan, through a Deed of Sale. He testified that he personally paid the purchase price in cash and that he now owns the lots where Hagonoy Lumber is operating. On the other hand, petitioner argued that the amount paid by respondent was her share in the profits of their parents' businesses and not a loan obligation. She further questioned the validity of the Deed of Partition and Deed of Sale, but admitted the due execution of the said documents. The Regional Trial Court (RTC) ruled in favor of respondent, ordering petitioner to pay him the principal amount with interest. The RTC held that the P200,000.00 was indeed a loan from respondent's own funds. Petitioner appealed the decision to the Court of Appeals (CA), which affirmed the RTC's ruling. The CA found no merit in petitioner's arguments and held that the inclusion of respondent's testimony in the decision did not prejudice her defense.

ISSUES:

  1. Whether the respondent's testimony as adverse witness during cross-examination by his own counsel should be considered as part of the petitioner's evidence.

  2. Whether the trial court committed a clear and palpable legal error in its application and legal significance of the rule on examination of adverse party or hostile witness.

  3. Whether the trial court committed a clear and palpable legal error in deviating from established Supreme Court decisions and disregarding important facts and circumstances supported by clear and convincing evidence.

  4. Whether the trial court committed a clear and palpable legal error in the requirements and correct application of the "best evidence rule" under Section 3, Rule 130 of the Revised Rules of Court.

  5. Whether the petitioner is bound by the testimony of the respondent, who was called as an adverse witness.

  6. Whether the RTC overlooked certain facts in arriving at its decision.

RULING:

  1. The Supreme Court held that the petitioner's case was not unduly prejudiced by the trial court's treatment of the respondent's testimony during cross-examination as her evidence. Even if there was an error committed in ascribing the testimony to the petitioner, it was a harmless error that would not change the result of the case. The court explained that the delineation of a piece of evidence as part of one party's evidence or the other is only significant in determining whether the party with the burden of proof met the quantum of evidence needed to discharge that burden. In civil cases, the burden of proof lies with the plaintiff, who must establish her case by preponderance of evidence. The court emphasized that preponderance of evidence is determined by considering all the facts and circumstances of the case, regardless of who presented the evidence.

  2. The petitioner is bound by the testimony of the respondent. While the calling party is not bound by the adverse witness's testimony in the sense that they may contradict it and introduce other evidence, they are still bound by the testimony if it remains unrebutted or uncontradicted. In this case, the petitioner failed to discredit the respondent's testimony.

  3. The RTC did not overlook any facts in arriving at its decision. The findings and conclusions of the trial court were in accord with those of the CA, and were supported by the evidence on record.

PRINCIPLES:

  • The burden of proof lies with the plaintiff in civil cases, who must establish her case by preponderance of evidence.

  • The delineation of a piece of evidence as part of one party's evidence or the other is not determinative of its weight or admissibility. Preponderance of evidence is determined by considering all the facts and circumstances of the case.

  • A party who calls an adverse witness is not bound by their testimony only to the extent that they may contradict it and introduce other evidence (impeachment). However, if the testimony remains unrebutted or uncontradicted, the calling party is bound by it.

  • In considering the entirety of the evidence presented, the more important consideration is not which party offered the evidence, but whether it is given the appropriate weight by the court.

  • Findings of fact by the CA, affirming those of the trial court, are given great respect, even finality, by the Supreme Court. Only errors of law, not of fact, may be reviewed by the Supreme Court in petitions for review on certiorari.

  • A check can be evidence of indebtedness and can prove a loan transaction.

  • A party who no longer has any interest or share in a business enterprise cannot demand a share in its profits.

  • The notarization of a private document converts it into a public document, making it admissible in court without further proof of its authenticity.

  • A notarized document carries evidentiary weight as to its due execution, and documents acknowledged before a notary public have the presumption of regularity.

  • The best evidence rule applies only when the content of a document is the subject of the inquiry, and testimonial evidence is admissible when the issue is whether the document was executed or exists, or on the circumstances surrounding its execution.

  • Production of the original document may be dispensed with in the trial court's discretion when the opponent does not dispute the contents of the document and no useful purpose will be served by requiring its production.

  • The terms of an agreement are to be deciphered from the language used in the contract itself, not from post facto assertions or unilateral claims of the parties or third parties who are strangers to the contract.