Chua Gaw v Chua

G.R. No. 160855; April 16, 2008; Nachura, J

Facts
Antecedent Facts
1. Spouses Chua Chin & Chan Chi were the founders of three enterprises (Hagonoy Lumber, Capitol
Sawmill and Columbia Wood Industries). The couple had seven children. Sometime in 1986, the
patriarch (Chua Chin) died, leaving his spouse and 7 children (including petitioner Concepcion Chua, and
Respondent Suy Ben Chua) as surviving heirs. Hagonoy lumber was then worth about P415,500.
2. The heirs then executed a deed of extra-judicial partition where 1/2 of Hagonoy lumber goes to the
surviving spouse (Chan Chi), and the other half was distributed to Chan Chi and the seven children in
equal shares (around 26k each). The same document also said that the heirs voluntarily renounce and
waive their shares over hagonoy lumber in favor of 1 heir, Chua Sioc Huan.

Directly Related Facts:

3. In May 1988, petitioner Concepcion Chua Gaw and her husband asked Suy Ben Chua to lend them
P200,000 for the construction of their house. This was payable in 6 months with interest. A check was
thus issued and delivered to sps. Gaw.
4. [Aug. 1, 1990] Chua Sioc Huan executed a deed of sale over all of her rights and interests in Hagonoy
Lumber for P255,000 in favor of Suy Ben Chua.
5. Spouses Gaw failed to pay the amount borrowed and sent a demand letter. Still failing to heed the
demand, respondent Chua filed a complaint for a sum of money against Sps. Gaw before the RTC.
a. In their Answer, Sps. Gaw contended that the P200,000 was not a loan, but their share in the
profits of Hagonoy Lumber, one of her family’s business. They allegedly asked the respondent for an
accounting & payment of their share in Hagonoy Lumber, Capital Sawmills and Columbia Wood.
They claimed that the mother still wanted to retained control of the business, and to insure that Sps.
Gaw will defer their demand, respondent allegedly gave P200,000 as her share in the profits of
Hagonoy Lumber.
b. In reply, respondent claims that they have no right whatsoever in the 3 businesses.
c. Sps. Gaw then filed an answer with amended compulsory counterclaim where they claimed 1/6 of
hagonoy lumber (worth about P500k), Concepcion being a compulsory heir.
d. In his Answer respondent explained that the other sister, Chua Sioc Huan, became the sole owner
of Hagonoy Lumber when the Deed of Partition was executed in 1986. In turn, he became the sole
owner of Hagonoy Lumber when he bought it from Chua Sioc Huan in 1990.
e. In reply, the Gaws counter that the documents referred to by Suy Ben were mere paper
arrangements which did not express the real intention by the parties. It was supposedly just
prepared upon advice of a counsel until the heirs could sign a final, binding agreement which has yet
to be done.
6. At trial Sps. Gaw called Suy Ben to testify. On Cross testified that Chua Sioc HUan acquired Hagonoy
Lumber by a deed of partition executed by the heirs and he became owner when he bought the same
from his sister. On re-direct he claims that he paid his sister in cash.
7. RTC: The 200,000 was a loan obtained by Sps. Gaw from Suy Ben. They must thus pay the principal
obligation with interest, as well as P60k atty’s fees.
a. The court found that the P200k was advanced by Suy Ben out of his own funds via a personal
check and was not based on renumerations for services rendered to Hagonoy lumber.
b. Further, the deed of partition and the deed of sale involved in the transfer of ownership of
Hagonoy Lumber was never impugned. Although respondent failed to produce originals of the
documents, Petitioner judicially admitted the due execution of the Deed of Partition and even
 acknowledged her signature. This constitutes an exception to the best evidence rule. Neither did
the parties to the documents contest the validity of the deed of sale.
8. CA: Affirmed. Agreeing with the RTC: the testimony of petitioner regarding the alleged “paper
agreement” was uncorroborated. She should have presented the other heirs to attest to the truth of her
allegation. Instead, petitioner admitted the due execution of the said documents. Since petitioner did
not dispute the due execution and existence of Exhibits H and I, there was no need to produce the
originals of the documents in accordance with the best evidence rule.
9. Petitioner thus filed a petition for review on certiorari.

Issue
W/N the mere copies of the Deed of Partition and the Deed of Sale were erroneously admitted in
evidence despite failing to comply with the best evidence rule—NO.
 The best evidence rule [Rule 130, Section 3] applies only when the content of such document is
the subject of the inquiry.
o Where the issue is only as to whether such document was actually executed, or exists, or on the
circumstances relevant to or surrounding its execution, the best evidence rule does not apply
and testimonial evidence is admissible. Any other substitutionary evidence is likewise admissible
without need to account for the original.
o The production of the original may be dispensed with, in the trial courts discretion, whenever
the opponent does not bona fide dispute the contents of the document and no other useful
purpose will be served by requiring production.
o Since there was no dispute regarding the terms of either deed, the best evidence rule does not
apply to this case. What petitioner alleges is merely that there was a contemporaneous
agreement that the transfer of Hagonoy Lumber to their sister was only temporary. However, A
contract between the parties is the formal expression of the parties rights, duties and
obligations. It is the best evidence of the intention of the parties. The intention must be
deciphered from the language used in the contract, and not from unilateral assertions of one of
the parties/third parties.
 Thus, when the terms of an agreement have been reduced to writing, it is deemed to
contain all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written
agreement (Rule 130 Sec. 9)

W/N Petitioner was unduly prejudiced by the RTCs treatment of respondent’s testimony (as adverse
witness during cross-examination by his own counsel) as part of her evidence—NO.
 Petitioner argues that the adverse witness testimony elicited during cross-examination should not
be considered as evidence of the calling party. Particularly during the cross examination by the
adverse party’s own counsel.
o SC: If there was an error, it constitutes a harmless error that does not change the results of the
case. The delineation of a piece of evidence as part of the evidence of one party or another is
only significant in determining whether the party with the burden of proof was able to meet the
quantum of evidence. In civil cases, where the rule is preponderance of evidence, it barely
matters who with a piece of evidence is credited. In the end, the court will have to consider the
entirety of the evidence presented by both parties.
o That the witness is the adverse party does not necessarily mean that the calling party will not be
bound by the former’s testimony. The fact remains that it was at his instance that his adversary
was put on the witness stand. Unlike an ordinary witness, the calling party may impeach an
 adverse witness in all respects as if he had been called by the adverse party, except by evidence
of his bad character. A party who calls his adversary as a witness is, therefore, not bound by the
latter’s testimony only in the sense that he may contradict him by introducing other evidence to
prove a state of facts contrary to what the witness testifies on.
o In this case, petitioner failed to discredit the respondent’s testimony on how Hagonoy Lumber
became his sole property.

W/N the P200k was really a loan – YES.

 A check may be evidence of indebtedness, and could prove a loan transaction.
 The allegation that the P200k was an advance on her share in the profits of Hagonoy Lumber is
implausible. The heirs freely renounced their rights in favor of Chua Sioc Huan as shown in the Deed
of partition which was notarized and signed by petitioner herself. The sister thus became the sole
owner of Hagonoy Lumber.
o When the check for P200k was delivered in 1988, Chua Sioc Huan was already the sole owner,
and petitioner had no more interest in the business.
o Respondent became the owner of the business only in 1990. Thus it could not have been given
as an advance on the profits in 1988 because at the time, neither petitioner or respondent had
any interest in the business.