DISQUALIFICATION BY REASON OF PRIVILEGED COMMUNICATION PEOPLE v.

CARLOS -appeal; CFI -subj: letter written to defendant by wife admissible as evid of premeditation as to qualify homicide? FACTS: The court below found that the crime was committed with premeditation and therefore constituted murder. This finding can only be sustained by taking into consideration Exhibit L, a letter written to the defendant by his wife and seized by the police in searching his effects on the day of his arrest. It is dated May 25, 1924, two days before the commission of the crime and shows that the writer feared that the defendant contemplated resorting to physical violence in dealing with the deceased. ARGUMENT:

The letter is therefore nothing but pure hearsay and its admission in evidence violates the constitutional right of the defendant in a criminal case to be confronted with the witnesses for the prosecution and have the opportunity to cross-examine them. In this respect there can be no difference between an ordinary communication and one originally privileged.

The question is radically different from that of the admissibility of testimony of a third party as to a conversation between a husband and wife overheard by the witness. Testimony of that character is admissible on the ground that it relates to a conversation in which both spouses took part and on the further ground that where the defendant has the opportunity to answer a statement made to him by his spouse and fails to do so, his silence implies assent. That cannot apply where the statement is contained in an unanswered letter. PEOPLE v. FRANCISCO

letter = privileged communication not admissible in evidence. PRINCIPLE: where a privileged communication from one spouse to another comes into the hands of a third party, whether legally or not, without collusion and voluntary disclosure on the part of either of the spouses, o the privilege is thereby extinguished and

-appeal; CFI; parricide case -in issue is the rebuttal testi of wife admissible? Crt said Yes ARGUMENT: Defense impugns the admissibility of the testimony of appellant's wife, invoking the provision of section 26 (d) of Rule 123 prohibiting the wife and the husband from testifying for or against each other. PRINCIPLE:

the communication, becomes admissible.

if

otherwise

competent,

Professor Wigmore: "For documents of communication coming into the possession of a third person, a distinction should obtain, analogous to that already indicated for a client's communications; i.e.,

if they were obtained from the addressee by voluntary delivery, = privileged (for otherwise the privilege could by collusion be practically nullified for written communications) ; but if they were obtained surreptitiously or otherwise without the addressee's consent = X privileged HOW letter obtained: through a search for which no warrant appears to have been issued counsel for the defendant cites the causes of Boyd and Boyd vs. United States as authority for the proposition that documents obtained by illegal searches of the defendant's effects are not admissible in evidence in a criminal case.

Present Case:

Gen Rule = prohibition ; reasons: First, identity of interest; second, the consequent danger of perjury; third, the policy of the law which deems it necessary to guard the security and confidences of private life even at the risk of an occasional failure of justice, and which rejects such evidence because its admission would lead to domestic disunion and unhappiness; and, fourth, because where a want of domestic tranquility exists, there is danger of punishing one spouse through the hostile testimony of the other. Exceptions, both in civil actions between the spouses and in criminal cases for offenses committed by one against the other. Exceptions are backed by sound reasons which, in the excepted cases, outweigh those in support of the general rule. For instance, where the marital and domestic relations are so strained that there is no more harmony to be preserved nor peace and tranquility which may be disturbed, the reason based upon such harmony and tranquility fails. identity of interests disappears and the consequent danger of perjury based on that identity is non-existent. Likewise in such a situation, the security and confidences of private life which the law aims at protecting will be nothing but ideals which, through their absence, merely leave a void in the unhappy home.

PRESENT CASE: Inadmissible Pure Hearsay

The letter was written by the wife of the defendant and if she had testified at the trial the letter might have been admissible to impeach her testimony, but she was not put on the witness-stand and the letter was therefore not offered for that purpose. If the defendant either by answer or otherwise had indicated his assent to the statements contained in the letter it might also have been admissible, but such is not the case here; the fact that he had the letter in his possession is no indication of acquiescence or assent on his part.

Instant case: the wife did not testify in the direct evidence for the prosecution but under circumstances presently to be stated. wife only testified against her husband after he, testifying in his own defense, imputed upon her the killing of their little son.

Wharton:

Waiver of objection to incompetency.-xxx

A party calling an incompetent witness as his own if, after such incompetency appears, there is failure to make timely objection, by a party having knowledge of the incompetency If the objection could have been taken during the trial, a new trial will be refused and the objection will not be available on writ of error. If, however, the objection of a party is overruled and the ruling has been excepted to, the party may thereafter examine the witness upon the matters as to which he was allowed to testify to without waiving his objections to the witness's competency

xxx gave the wife, in rebuttal; the right to so testify, at least, in self-defense, not, of course, against being subjected to punishment in that case in which she was not a defendant but against any or all of various possible consequences which might flow from her silence, namely a criminal prosecution against her which might be instituted by the corresponding authorities upon the basis of her husband's aforesaid testimony; in the moral and social sense, her being believed by those who heard the testimony orally given, as well as by those who may read the same, once put in writing, to be the killer of her infant child.

law of evidence = law of common sense; most natural reaction - to deny upon rebuttal the new matter new matter = imputation of the crime upon his wife. Hence, in giving such testimony, the husband must, in all fairness, be held to have intended all its aforesaid natural and necessary consequences.

Illustration: the accused waives his or her privilege by calling the other spouse as a witness for him or her, thereby making the spouse subject to cross-examination in the usual manner, the reason being that the State is entitled to question the spouse so presented as to all matters germane and pertinent to the direct testimony.

By his said act, the husband -himself exercising the very right which he would deny to his wife upon the ground of their marital relations- must be taken to have waived all objection to the latter's testimony upon rebuttal, even considering that such objection would have been available at the outset. It may be said that the accused husband thought that he would have more chances of convincing the court of his pretended innocence if he pointed to his wife as having caused the death of their child, instead of simply denying that he was the author of the fatal act. if he was to be allowed, for his convenience, to make his choice and thereby impute the act upon his spouse, justice would be partial and one-sided if both the State and the wife were to be absolutely precluded from introducing the latter's rebutting testimony. As well settled as this rule of marital incompetency itself is the other that it may be waived. Waiver of incompetency.-Objections to the competency of a husband or wife to testify in a criminal prosecution against the other may be waived as in the case of the other witnesses generally. Thus, the accused waives his or her privilege by calling the other spouse as a witness for him or her, thereby making the spouse subject to cross-examination in the usual manner. It is well established that where an accused introduces his wife as a witness in his behalf, the state is entitled to question her as to all matters germane and pertinent to her testimony on direct examination. It is also true that objection to the spouse's competency must be made when he or she is first offered as a witness, and that the incompetency may be waived by the failure of the accused to make timely objection to the admission of the spouse's testimony, although knowing of such incompetency, and the testimony admitted, especially if the accused has assented to the admission, either expressly or impliedly. Other courts have held that the witness's testimony is not admissible even with the other spouse's consent. Clearly, if the statute provides that a spouse shall in no case testify against the other except in a prosecution for an offense against the other, the failure of the accused to object does not enable the state to use the spouse as a witness.

CAB: when the herein appellant gave his testimony in question in his defense, the State had the right to rebut the new matter contained in that testimony consisting in the imputation upon his wife of the death of the little boy. And that rebuttal evidence, which was rendered necessary by appellant's own testimony, could be furnished only by his wife who, as he fully knew, was alone with him and their son at the precise place and time of the event. This right to rebut is secured to the State, no less than to the accused, by Rule 115, section 3, paragraph (c), the provision further authorizing the court, in furtherance of justice, to permit one or the other party to offer "new additional evidence bearing upon the main issue in question." So that if the waiver that we here declare to flow from the abovementioned testimony of appellant does not happen to be among those which were mentioned in the cases cited by Mr. Wharton, that is no reason against the existence of said waiver. When the husband testified that it was his wife who caused the death of their son, he could not justly expect the State to keep silent and refrain from rebutting such new matter in his testimony, through the only witness available, -namely, the wife; nor could he legitimately seal his wife's lips and thus gravely expose her to the danger of criminal proceedings against her being started by the authorities upon the strength and basis of said testimony of her husband, or to bear the moral and social stigma of being thought, believed, or even just suspected, to be the killer of her own off spring. A decent respect and considerate regard for the feelings of an average mother will tell us that such a moral and social stigma would be no less injurious to her than a criminal punishment. And if the wife should, in such a case and at such a juncture, be allowed to testify upon rebuttal, the scope of her testimony should at least be the same as that of her husband. Since the husband had testified that it was his wife who caused the death of the little boy, she should be allowed to say that it was really her husband who did it. We hold that it is not necessary, to justify such rebuttal evidence, and to declare the existence of the waiver upon

which it is based, that the wife be in jeopardy of punishment in the same case by reason of such testimony of her accused husband.

The rule of waiver of objection to the competency of witnesses generally does not require this prerequisite in the case between husband and wife. Rather the rule makes the determination of the question hinge around the consequences, which by common sense, in justice and in fairness, should be deemed to have been expected by the spouse who first testified naturally to flow from his act of giving that testimony. At any rate, the trial court not only had the power to allow the State to utilize the wife as rebuttal witness, but also the discretion to permit "new additional evidence bearing upon the main issue in question." But even restricting the wife's testimony to merely contradicting her husband's version that she was the one who killed their child, there is evidence beyond reasonable doubt that appellant was the killer. With the testimony of both spouses upon the point, instead of that of the accused husband alone, let justice take its course.

consent of her husband, and as he is dead and cannot grant that permission, it follows that this witness is disqualified from testifying in this case in which her husband is the injured party. Defenses argument: witness is competent o Disqualification relates only to cases where a husband/wife of one of the parties to a proceeding is called to testify o The parties to the prosecution are the govt and accused (Antipolo) o The marriage has been dissolved by reason of Dinals death, Susana is no longer his wife o Therefore not subject to any disqualification arising from status of marriage Facts which the testimony to seek to prove are material and relevant o If proven they mightve lead to acquittal of accused o Dying declarations of Dinal concerning his death injuries were due to a fall and not acts of Antipolo

ISSUE:

FERIA J., dissenting: The new theory of the majority is evidently untenable, for it is predicated upon the incorrect premise or assumption that the above-mentioned reasons or grounds of the in capacity of one of the spouses to testify against the other in a proceeding in which the latter is a party, are also applicable to testimony of one spouse against the other who is not a party to the cause in which it is offered or given, as in the present case. This premise or assumption is incorrect, for said reasons do not apply to the latter case. Were it applicable, the law would have also disqualified one spouse to give testimony which in any way disparages or disfavor the other although the latter is not a party to the cause; but the law does not so. The prohibition contained in section 26 (d) of Rule 123 only relates to cases in which the testimony of a spouse is offered for or against the other in a proceeding to which the latter is a party (U. S. vs. Concepcion, 31 Phil., 182; People vs. Natividad, 70 Phil., 315). And the reason is obvious. Although the testimony of the husband against his wife who is not a party to the case is admissible; yet, as said testimony can not be used as evidence against the wife in a civil case or criminal prosecution against her, it would not effectively strain the marital and domestic relations; lead to domestic disunion and unhappiness; disturb the peace, harmony, and tranquility of the family, and destroy the identity of interest. (See case!) US v. ANTIPOLO FACTS: TC convicted Antipolo for homicide for the murder of Dinal Antipolo appeals o Alleged error of TC: refusal of the trial judge to permit Susana Ezpeleta, the widow of Dinal, to testify on behalf of the defense concerning certain alleged dying declarations Susana was called to the stand by the defense o Stated that she is the widow of Dinal o Was asked: On what occasion did your husband die?

WON Susana is disqualified from testifying on the dying declarations of her husband? NO, court erred in excluding testimony, new trial granted

Fiscal objected to the question sustained by TC

I object to the testimony of this witness. She has just testified that she is the widow of the deceased, Dinal, and that being so I believe that she is not competent to testify under the rules of procedure in either civil or crim cases, unless it be with the

RATIO: Relevant Rule: Sec 58 of General Orders No 58 (1900) o Except with the consent of both, or except in cases of crime committed by one against the other, neither husband nor wife shall be a competent witness for or against the other in a crim action or proceeding to which on or both shall be parties Reasons for rule: o At common law, neither a husband nor wife was a competent witness for or against the other in any judicial proceedings, civil or crim, to wc the other was a party a very serious injury would be done to the harmony and happiness of husband and wife and the confidence wc should exist between them o Object of the rule is to secure domestic happiness by placing the protecting seal of the law upon all confidential communications bet husband and wife; whatever has come to the knowledge of either by means of the hallowed confidence wc that relation inspires, cannot afterwards be divulged in testimony even though the other party be no longer living Case does not fall w/in text of the statute o Purpose of Sec 58: to protect accused persons against statements made in confidence engendered by the marital relation, and to relieve the husband or wife to whom such confidential communications might have been made from the obligation of revealing them to the prejudice of the other spouse o When a person at the pt of death as a result of injuries he has suffered makes a statement regarding the manner in wc he received those injuries, the communication made is in no sense confidential Such a communication is made for the express purpose that it may be communicated after the death of the declarant to the authorities concerned in inquiring into the cause of his death Same theory underlies Sec 383 (3) of Act No 190 o A husband cannot be examined for or against his wife w/o her consent; nor a wife for or against her husband w/o his consent; nor can either, during the marriage or afterwards, be, w/o consent of the other, examined as to any communication made by one to the other during the marriage; but this

exception does not apply to a civil action or proceeding by one against the other, or to a crim action or proceeding for a crime committed by one against the other. during the marriage or afterwards o Relates only to cases where the testimony of a spouse is offered for or against the other on a proceeding to wc the other is a party o Intended to cover cases in wc the marriage has been dissolved otherwise than by death of one of the spouses (e.g. annulment) Declaration of a deceased person while in anticipation of certain impending death, concerning the circumstances leading up to the death, are admissible in a prosecution of the person charged with killing the declarant o Dying declarations are admissible in favor of the defendant as well as against him o Widow of a deceased may testify regarding his dying declarations On grounds of public policy the wife cannot testify against her husband as to what came to her from him confidentially or by reason of the marriage relation, but this rule doesnt apply to a dying communication made by the husband to the wife on the trial of the one who killed him o The declaration of the deceased made in extremis in such cases is a thing to be proven, and this proof may be made by any competent witness who heard the statement o It cannot be contended that the dying declaration testified to by the witness was a confidential communication made to her; on the contrary, it was evidently made for the express purpose that it should be testified to in the prosecution of the defendant BARTON v. LEYTE ASPHALT & MINERAL OIL CO.

FACTS: (sorry, mafacts talaga siya pero yng relevant facts for the topic is in the ratio mismo- I HATE this case!) Axn by Barton to recover from Leyte Asphalt & Mineral Oil Co., Ltd., as damages for breach of contract, $318,563.30, and secure a judicial pronouncement to the effect that the plaintiff is entitled to an extension of the terms of the sales agencies specified in the contract The Co is the owner of a valuable deposit of bituminous limestone & other asphalt products in Leyte, known as the Lucio Mine April 21, 1920: William Anderson, pres & gen manager of the Co, wrote to Barton authorizing him to sell the products of the Lucio Mina in Australia & New Zealand o This was superseded by a 2nd letter approved by the Cos BOD & formally accepted by Barton Barton became the agent of the Co in Australia, Saigon, New Zealand, Tasmania, Saigon, India, Sumatra, Java, China, HK & Japan During the agency, Barton alleged that he rendered advertising services, demonstrated the products, spent money to advertise, shipped samples of the products all over the world o For these services and expenditures he sought to recover the sum of $16,563.80, = not awarded by the TC & not appealed from Barton went to San Francisco & entered into an agreement w Ludvigsen & McCurdy (L&M) o The firm was made a sub-agent & given the sole selling rights for the bituminous limestone products of the Co from 1 yr

In Australia, he also entered into an agreement w Smith who acted as sales agent wc agreement was extended for anthr year L&M wrote Barton, telling him they might order 6k tons of bituminous wc Barton accepted Barton returned to Manila; Anderson wrote to him saying the Co cldnt handle big contracts Barton informed Anderson of the San Francisco order & other orders for large quantities of limestone o Anderson told him that such orders wldnt be filled Despite this, Barton wrote letters to the Co, to prepare certain quantities of limestone to be shipped to San Francisco & Sydney o For the Sydney shipment, Barton advised the Co that White wld be the person whom the contract had been made & that the consignee of the shipment wld be named later o Barton claims that the name White was based on inference wc he had erroneously drawn from the cable sent by Smith, informing him of the order but that his real intention was to have this shipment consigned to Australia in response to Smiths order Co acknowledged rcpt of the orders to be consigned to John Chapman Co (san Francisco) & White (Sydney) & further stated that no orders wld be entertained until cash was deposited w the Intl Banking Corp or Chartered Bank of India, Australia & China in Cebu o Barton questioned the Cos right to demand cash deposits b4 the filling of the orders but said that he arranged for deposits to be made on attl shipments, if the Co signifies it ability to fulfill the orders on the dates he indicated Barton went to Japan where he met Hiwatari who claims to have been appointed as exclusive sales agent for Barton in Japan no docum evincing this While in Tokyo he procured the letter Exhibit W, addressed to himself, to be signed by Hiwatari. o The letter contained an order for 1k tons of bituminous limestone to be delivered as soon after July 1,1921, as possible. o In the letter Hiwatari states, "on receipt of the cable from you, notifying me of date you will be ready to ship, and also tonnage rate, i will agree to transfer through the Bank of Taiwan, of Tokyo, to the Asia Banking Corporation, of Manila, P. I., the entire payment of $16,000 gold, to be subject to your order on delivery of documents covering bill of lading of shipment, the customs report of weight, and prepaid export tax receipt. I will arrange in advance a confirmed or irrevocable letter of credit for the above amount so that payment can be ordered by cable, in reply to your cable advising shipping date." o it was also stated that if the material should prove satisfactory after being thoroughly tested by the Paving Department of the City of Tokyo, he would contract for a minimum quantity of 10k additional tons, to be used within a year from September 1, 1921, and that in this event the contract was to be automatically extended for an additional four years. Hiwatari wrote anthr letter to Barton informing him that the bank wld be able to issue a credit note for the contract but that he wldnt be personally able to place his approval on the contract The contents of the letter (Exhibit W/japan order) was conveyed by Barton to his atty Frank Ingersoll o Ingersoll wrote to the Co saying he was requested by Barton to notify them that Barton had accepted an order from Hiwatari, approved by the Bank of Taiwan, for a min pd of 5 yrs , the first shipment of one thousand tons to be made as early after July 1 as possible.

*THIS COMMUNICATION DIDNT REFLECT THE CONTENTS OF HIWATARIS LETTER (letter only requested for 1k tons, the remainder being contingent on future eventualities) the only written communications between the Barton & the Co in which the former gave notice of having any orders for the sale of bituminous limestone are the four letters Exhibits Y, AA, BB, and II. o 1st letter: Barton advises the Co to be prepared to ship five thousand tons of bituminous limestone, to be consigned to John Chapman Co., of San Francisco to be loaded by May 5, and a further consignment of five thousand tons, through a contract with Henry E. White, consignees to be named later. o Exhibit BB: order from Hiwatari, of Tokyo, approved by the Bank of Taiwan, for a minimum of ten thousand tons annually for a period of five years, first shipment of a thousand tons to be as early after July 1 as possible. o Exhibit II: Barton gives notice of an "additional" order from H.E. White, Sydney, for two lots of bituminous limestone of five thousand tons each, one for shipment not later than June 30, 1921, and the other by July 20,1921. And Barton reports for the first time an order for five thousand tons from F.B. Smith, to be shipped to Brisbane, Australia, by June 30, and a similar amount within thirty days later. Barton filed an amendment to his complaint in which he set out, in tabulated form, the orders which he claims to have received and upon which his letters of notification to the Co were based. o In his amended answer the name of Ludvigsen & McCurdy appears for the first time; and the name of Frank B. Smith, of Sydney, is used for the first time as the source of the intended consignments of May 1, May 22, and June 1. o the letters, Exhibits G, L, M, and W, containing the orders from Ludvigsen & McCurdy, Frank B, Smith and H. Hiwatari were at no time submitted for inspection to any officer of the defendant company, except possibly the Exhibit G, which the plaintiff claims to have shown to Anderson in Manila on March 12, 1921. I: whether or not the orders contained in Exhibits G, L, M, and W, in connection with the subsequent notification thereof given by the plaintiff to the defendant, are sufficient to support the judgment rendered by the trial court (wc ruled for Barton) The transaction indicated in the orders from Ludvigsen & McCurdy and from Frank B. Smith must be excluded from consideration as emanating from persons who had been constituted mere agents of the plaintiff. o San Francisco order and the Australian orders are the same in legal effect as if they were orders signed by the plaintiff and drawn upon himself; and it cannot be pretended that those orders represent sales to bona fide purchasers found by the plaintiff. The original contract by which the plaintiff was appointed sales agent for a limited period of time in Australia and the United States contemplated that he should find reliable and solvent buyers who should be prepared to obligate themselves to take the quantity of bituminous limestone contracted for upon terms consistent with the contract. o These conditions were not met by the taking of these orders from the plaintiff's own subagents, which was as if the plaintiff had bought for himself the commodity which he was authorized to sell to others.

A267, Code of Commerce: no agent shall purchase for himself or for another that which he has been ordered to sell. Its a ban from a brokers purchasing from his principal unless the latter w full knowledge of the facts & circums acquiesces to such course & broker shld be in GF o A sale made by a broker to himself without the consent of the principal is ineffectual whether the broker has been guilty of fraudulent conduct or not. The Co correct in contending that the Barton has not in fact found any bona fide purchasers ready and able to take the commodity contracted for upon terms compatible with the contract which is the basis of the action. The contract contained provs under wc the period of the contract cld be extended o This privilege was probably considered a highly important incident of the contract; and it will be seen that the sale of five thousand tons which the plaintiff reported for shipment to San Francisco was precisely adjusted to the purpose of the extension of the contract for the United States for the period of an additional year; and the sales reported for shipment to Australia were likewise adjusted to the requirements for the extension of the contract in that territory. Given the circumstances surrounding these contracts as they were reported to the defendant company and the concealment by the plaintiff of the names of the authors of the orders, - who after all were merely the plaintiff's subagents, - the officers of the defendant company might justly have entertained the suspicion that the real and only person behind those contracts was the plaintiff himself. o I: WON the Co was justified in laying down the condition that no order wld be entertained unless cash is deposited w Intl banking Corporation or the Chartered Bank of India, Australia & China in Cebu. Barton: points to a stipulation in the contract which provides that contracts with responsible parties are to be accepted "subject to draft attached to bill of lading in full payment of such shipment." What happened here seems to have the character of mere diplomatic parrying since Barton had no contract from a responsible purchaser other than his own subagents & the Co cldnt have filled the contracts even if they were backed by the Bank of England Bartons letters (exhibit Y & AA) contained ample assurance that deposits for the amount of each shipment would be made with a bank in Manila provided the defendant would indicate its ability to fill the orders; but these assurances rested upon no other basis than the financial responsibility of the plaintiff himself, and this circumstance doubtless did not escape the discernment of the defendant's officers. Wrt to the Japan order, while Hiwatari he claims he had been promised the exclusive agency under the plaintiff for Japan, nevertheless it does not affirmatively appear that he had been in fact appointed to be such at the time he signed the order Exhibit W at the request of the plaintiff. o Thus, can be assumed that he was at that time a stranger to the contract of agency. o BUT, it clearly appears, however, that he did not expect to purchase the thousand tons of bituminous limestone referred to in his order without banking assistance; and although the submanager of the Bank of Taiwan had said something encouraging in respect to the matter, nevertheless that official had

refrained from giving his approval to the order Exhibit W. SOits not shown affirmatively that this order proceeds from a responsible source.

I: WON the TC judge was correct in refusing to admit Exhibits 2, 7, 8, 9 and 10, offered by the defendant, and in admitting Exhibit E, offered by the plaintiff. NO Exhibit 2: letter dated more than three weeks after the action was instituted, in which the defendant's assistant general manager undertakes to reply to the plaintiff's letter of March 29 preceding. o This was evidently intended as an argumentative presentation of the plaintiff's point of view in the litigation then pending, and its probative value is so slight, even if admissible at all, that there was no error on the part of the trial court in excluding it. Exhibits 7, 8, 9 and 10: are correspondence which passed between the parties by mail or telegraph during the first part of the year 1921. o subject-matter of this correspondence relates to efforts that were being made by Anderson to dispose of the controlling interest in the defendant corporation o Exhibit 9 in particular contains an offer from the plaintiff, representing certain associates, to buy out Anderson's interest for a fixed sum. While these exhibits perhaps shed some light upon the relations of the parties during the time this controversy was brewing, the bearing of the matter upon the litigation before us is too remote to exert any definitive influence on the case. The trial court was not in error in excluding these documents. Exhibit E: letter from Anderson to the plaintiff in which information is given concerning the property of the defendant company. o That the output of the mine wld be abt 5 tons for 24hrs, w the equiptment they had then, but that w the installation of the model cable-way, the Co wld be able to handle 2k tons in 24hrs no legitimate reason for rejecting this document, although of slight probative value TOPIC: (letter of Barton to his atty) I: WON the trial judge was correct in excluding exhibit 14, as being confidential communication btwn client & lawyer. NO Exhibit 14 offered in evidence by the defendant: carbon copy of a letter written by the Barton to his attorney, Frank Ingersoll, Esq. where plaintiff states: o his profits from the San Francisco contract would have been at the rate of eighty-five cents (gold) per ton. authenticity of the document is admitted, and when it was offered in evidence by defendant, counsel for the plaintiff announced that he had no objection to the introduction of this carbon copy in evidence if counsel for the defendant would explain where this copy was secured. atty for the defendant said that he received the letter from the former attorneys of the defendant without explanation of the manner in which the document had come into their possession. Atty for P thus said: "We hereby give notice at this time that unless such an explanation is made, explaining fully how this carbon copy came into the possession of the defendant company, or any one representing it, we propose to object to its admission on the ground that it is a confidential communication between client and lawyer."

Even supposing that the letter was within the privilege which protects communications between attorney and client, this privilege was lost when the letter came to the hands of the adverse party. o it makes no difference how the adversary acquired possession. The law protects the client from the effect of disclosures made by him to his attorney in the confidence of the legal relation, but when such a document, containing admissions of the client, comes to the hand of a third party, and reaches the adversary, it is admissible in evidence.

"The law provides subjective freedom for the client by assuring him of exemption from its processes of disclosure against himself or the attorney or their agents of communication. This much is necessary for the maintenance of the privilege. Since the means of preserving secrecy of communication are entirely in the client's hands, and since the privilege is derogation from the general testimonial duty and should be strictly construed, it would be improper to extend its prohibition to third persons who obtain knowledge of the communications. One who overhears the communications, whether with or without the client's knowledge, is not within the protection of the privilege. The same rule ought to apply to one who surreptitiously reads or obtains possession of a document in original or copy." when papers are offered in evidence a court will take no notice of how they were obtained, whether legally or illegally, properly or improperly; nor will it from a collateral issue to try that question. Our conclusion upon the entire record is that the judgment appealed from must be reversed; and the defendant will be absolved from the complaint. It is so ordered, without special pronouncement as to costs of either instance. MALCOLM, J., dissenting: plaintiff and the defendant deliberately entered into a contract, the basis of this action. Plaintiff, proceeding pursuant to this contract, spent considerable effort and used considerable money to advance the interests of the defendant and to secure orders for its products. These orders were submitted to the president of the defendant company personally and alter formally by writing. B4 the suit was instituted, the only objection of the defendant was that the money should be deposited with either the International Banking Corporation or the Chartered Bank of India, Australia and China at Cebu, a stipulation not found in the contract. A reasonable deduction, therefore, is that the plaintiff presented orders under circumstances which were a substantial compliance with the terms of the contract with the defendant, and which insured to the defendant payment for its deliveries according to the price agreed upon, and that as the defendant has breached its contract, it must respond in damages. The ma says the orders emanated from subagents of the plaintiff, and that no bona fide purchasers were ready and able to take the commodity contracted for upon terms compatible with the contract. BUT, in the first place, that the contract nowhere prohibits the plaintiff to secure subagents AND the orders were so phrased as to make the persons making them personally responsible. the main point of the plaintiff which the majority decision misses entirely centers on the proposition that the orders were communicated by the plaintiff to the

defendant, and that the only objection the defendant had related to the manner of payment.

violation of RA 3019. Paredes filed a motion to quash, which was granted. Teofilo Gelacio, a taxpayer who initiated the perjury and graft charges against Paredes, claiming that the documents attached for the dismissal of the graft charge were actually those in the perjury charge, falsified to make it appear that Paredes was already arraigned and the case dismissed, to be able to invoke double jeopardy. He said Honrada conspiring with both Paredes and Sansaet did the falsification. Gelacio attached certifications from the Prov. Fiscal and the Presiding judge that no such arraignment happened. To evade responsibility Sansaet claimed that his participation in the scheme was induced by Paredes. This statement was intended to pave the way for his discharge as a government witness (Sec. 17, Rule 119) in the consolidated cases against the private respondents. The Ombudsman rejected the proposal for Sansaets discharge as state witness because (aside from disbelief that a lawyer such as him would be unwittingly induced to commit a crime) the testimony would fall under privileged communication between the lawyer and his client, which may be objected to, if presented in the trial. Reconsideration of said resolution having been likewise denied, the controversy was elevated to the SC by the prosecution in an original action for the issuance of the extraordinary writ of certiorari against respondent Sandiganbayan. ISSUES: (1) WON the attorney-client privilege should apply. NO (2) WON Sansaet is eligible for discharge to testify as a particeps criminis (an accomplice). YES RATIO: (1) The attorney-client privilege cannot apply in these cases, as the facts thereof and the actuations of both respondents therein constitute an exception to the rule. First, the court made a description of what may be considered as communication. It said that there is no particular mode by which a confidential communication shall be made by a client to his attorney. The privilege is not only as to the verbal or written form, but to other means as well. The fact that Sansaet was called to witness the preparation of the falsified documents by Paredes and Honrada was as eloquent a communication, if not more, than verbal statements being made to him by Paredes as to the fact and purpose of such falsification. It is significant that the evidentiary rule on this point has always referred to any communication, without distinction or qualification. And besides, it is impossible that no word passed between them during the preparation of the falsified documents. The acts and words of the parties during the period when the documents were being falsified were necessarily confidential since Paredes would not have invited Sansaet to his house and allowed him to witness the same except under conditions of secrecy and confidence. What is covered by the privilege is only as to communications relation to past crimes already committed, not to future crimes intended to be committed by the client.

Prior to the filing of suit, the defendant company never at any time raised any question as to whether the customers secured by plaintiff were "responsible firms" within the meaning of the contract, and never secured any information whatsoever as to their financial standing. Consequently, defendant is now estopped by its conduct from raising new objections for rejection of the orders. RE: the admission or the rejection by the trial court of certain exhibits. o what the Ct said relative to these two assignments is absolutely unnecessary for a judgment, and even as obiter dicta, contains unfortunate expressions. o Exhibit 14, for example, is a letter addressed by the plaintiff to his lawyer and probably merely shown to the counsel of the defendant during negotiations to seek a compromise. Whether that exhibit be considered improperly rejected or not would not change the result one iota. o The rule announced by the Court that it makes no difference how the adversary acquired possession of the document, and that a court will take no notice of how it was obtained, is destructive of the attorney's privilege and constitutes an obstacle to attempts at friendly compromise. o Uy Chico vs. Union Life Assurance Society, it was held that communications made by a client to his attorney for the purpose of being communicated to others are not privileged if they have been so communicated. o But here, there is no intimation that Exhibit 14 was sent by the client to the lawyer for the purpose of being communicated to others. o In Southern Railway Co. vs. White the Ct held that statements in a letter to a party's attorney handed by the latter to the opponent's attorney, are confidential communications and must be excluded. the decision of the majority appears to me to be defective in the following particulars: (1) It sets aside without good reason the fair findings of fact as made by the trial court and substitutes therefor other findings not warranted by the proof; (2) it fails to stress plaintiff's main argument, and (3) it lays down uncalled for rules which undermine the inviolability of a client's communications to his attorney. PEOPLE v. SANDIGANBAYAN FACTS: Paredes, formerly the Provincial Atty. of Agusan del Sur, then governor, now Congressman, was involved in a land patent case and a perjury case. In these cases, his lawyer was Sansaet. Paredes allegedly obtained a favorable decision on his land patent application through fraudulent misrepresentations. An information for perjury was thus filed against him. This was dismissed however because of prescription. After this, Paredes was again called to the Tanodbayan on the charge that he used his position as Prov. Atty. to influence the Bureau of Lands officials to act favorably on his land patent application, thus violating RA 3019 (Anti-Graft Law). Again, Sansaet was his lawyer. Sansaet defended by raising double jeopardy, attaching to his MFR a copy of the dismissal order, certificate of arraignment and the recommendation of the Department of Justice. A criminal case was subsequently filed against Paredes for

For the application of the attorney-client privilege, the period to be considered is the date when the privileged communication was made by the client to the attorney in relation to either a crime committed in the past or with respect to a crime intended to be committed in the future. In other words, if the client seeks his lawyers advice with respect to a crime that the former has theretofore committed, he is given the protection of a virtual confessional seal which the attorney-client privilege declares cannot be broken by the attorney without the clients consent. The same privileged confidentiality, however, does not attach with regard to a crime which a client intends to commit thereafter or in the future and for purposes of which he seeks the lawyers advice. Here, the testimony sought from Sansaet as state witness are the communications made to him by physical acts and/or accompanying words of Paredes at the time he and Honrada, either with the active or passive participation of Sansaet, were about to falsify, or in the process of falsifying, the documents which were later filed in the Tanodbayan by Sansaet and culminated in the criminal charges now pending in Sandiganbayan. Therefore, the confidential communications thus made by Paredes to Sansaet were for purposes of and in reference to the crime of falsification which had not yet been committed in the past by Paredes but which he, in confederacy with his present co-respondents, later committed. Having been made for purposes of a future offense, those communications are outside the pale of the attorney-client privilege. Since Sansaet is a conspirator in the falsification, the privilege does not apply, because it is well settled that in order that a communication between a lawyer and his client may be privileged, it must be for a lawful purpose or in furtherance of a lawful end. The existence of an unlawful purpose prevents the privilege from attaching. In fact, it has also been pointed out to the Court that the prosecution of the honorable relation of attorney and client will not be permitted under the guise of privilege, and every communication made to an attorney by a client for a criminal purpose is a conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the attorney under certain circumstances may be bound to disclose at once in the interest of justice. To prevent a conniving counsel from revealing the genesis of a crime which was later committed pursuant to a conspiracy, because of the objection thereto of his conspiring client, would be one of the worst travesties in the rules of evidence and practice in the noble profession of law. (Wow, heavy.) (2) Particeps criminis an adjective device is based on other considerations, such as the need for giving immunity to one of them in order that not all shall escape, and the judicial experience that the candid admission of an accused regarding his participation is a guaranty that he will testify truthfully. Sec. 17, Rule 119 requires that the accused persons are jointly charged, it does not strictly mean that there should be just one information for all the accused. The word joint should be interpreted as common to two or more, as involving the united activity of two or more, or done or produced by two or more working together, or shared by or affecting two or more. So even if the accused persons are charged under separate informations, the purpose of the Rule can be achieved by consolidation of the cases as an alternative mode. The rule on the discharge of an accused to be utilized as state witness clearly looks at his actual and individual participation in the commission of the crime, which may or may not have been perpetrated in conspiracy with the other accused.

On his being a state witness, satisfaction of requisites: Sansaet, being a conspirator (and in a conspiracy, the act of on is the act of all), he does not appear to be the most guilty, since hes just as guilty as the other two, and nowhere in the Rules does it say that the state witness has to be the least guilty. He is the only cooperative eyewitness to the actual commission of the falsification charged in the criminal cases pending before respondent court, and the prosecution is faced with the formidable task of establishing the guilt of the two other co-respondents who steadfastly deny the charge and stoutly protest their innocence. There is thus no other direct evidence available for the prosecution of the case; hence there is absolute necessity for the testimony of Sansaet whose discharge is sought precisely for that purpose. His testimony can be substantially corroborated on its material points by reputable witnesses. It does not appear that respondent Sansaet has at any time been convicted of any offense involving moral turpitude. Complying with all five requirements, Sansaet should be accepted as state witness. DISPOSITIVE PORTION: WHEREFORE, the writ of certiorari prayed for is hereby granted SETTING ASIDE the impugned resolutions and ORDERING that the present reliefs sought in these cases by petitioner be allowed and given due course by respondent Sandiganbayan. SO ORDERED. REGALA v. SANDIGANBAYAN ** penned by Justice Kapunan (en banc decision!) FACTS: 1. PCGG filed a complaint against Eduardo Cojuangco as one of the principal defendants for the recovery of the alleged ill gotten wealth, which includes shares of stocks in the named corporations in Case No. 33. 2. ACCRA lawyers, including Raul Roco, were named as codefendants. The ACCRA law firm performed legal services for its clients which included the organization and acquisition of business associations and/or orgs with the correlative and incidental service. 3. Part of the service is delivering to its client docus which substantiate the clients equity holdings. 4. ACCRA lawyers, including Roco, admit that they assisted in the organization and acquisition of the companies included in Case No. 33 and in keeping with the office practice, ACCRA lawyers acted as nominees-stockholders of the said corpos involved in sequestration.

5.

6.

Important fact: PCGG filed a third amended complaint. It excluded Raul Roco as defendant. PCGG based its exclusion of ROco on ROcos undertaking that he will reveal the identity of the principal/s for whom he acted as nominees/stockholder in the companies invoved in Case No. 33. The ACCRA lawyers opposed saying that they should also be excluded. Important Fact: PCGG said that they can be excluded provided they: a. disclose the identity of their clients b. submit docus substantiating the lawyer-client relationship

7.

c. 8.

9.

submit the deeds of assignments petitioners executed in favor of its clients covering their respective shareholdings. PCGG said that ROco complied with these condition precedents thats why it excluded him as defendant. As evidence, PCGG presented: a. letter to PCGG of the counsel of Roco reiterating previous request for reinvestigation by PCGG b. affidavit executed by ROco as attachment letter to letter a c. letter of Roco, Bunag and Kapunan Law offices to PCGG in behalf of Roco originally requesting the reinvestigation and/or re-examination of the evidence of PCGG against Roco in its Complaint in case No. 33. ** pero later sbi din ng court hindi naman talaga nagdisclose si Roco. He only assured PCGG that hed disclose the identity of the clients. Sandiganbayan refused to exclude the ACCRA lawyers as defendants in the case coz they did not comply with the conditions provided by PCGG. lawyers stance the condition precedents given fall under the ambit of lawyer-client privilege. We cant disclose the identity of our clients! revelation of the identity of the client is not within the ambit of the lawyer-client confidentiality privilege, nor are the docus we required protected, bec they are evidence of nominee status!

3.

10. ACCRA

11. PCGGs stance

THE EXCEPTIONS (when Clients name is privileged): (1) client identity is privileged where a strong probability exists that revealing the clients name would implicate that client in the very activity for which he sought the lawyers advice (see pp. 142-143 for some illustrations) (2) where disclosure would open the client to civil liability, his identity is privileged. (see pp. 144145 for illustrations) (3) where the governments lawyers have no case against an attys client unless, by revealing the clients name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the clients name is privileged. (see pp. 146-147 for illustrations) (4) the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal problem on which the client seeks legal assistance. (5) Where the nature of the atty-client relationship has been previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged since such revelation would otherwise result in disclosure of the entire transaction.

ISSUE: 1. WON the disclosure of the identity of clients is a privileged communication which a lawyer may not be compelled to disclose? HELD: General Rule is: NO it is not, but it is subject to exceptions. (in this case, the Court said that the disclosure of clients identity fell under the exceptions, hence cannot be identity disclosed.) RATIO: 1. The ACCRA lawyers are being prosecuted solely on the basis of activities and services performed in the course of their duties as lawyers. Quite obviously, petitioners inclusion as co-defendants in the complaint is merely being used as leverage to compel them to name their clients and consequently to enable the PCGG to nail these clients. PCGG has no valid COA against the ACCRA lawyers and should exclude them from the Third Amended Complaint

***IN OTHER WORDS, INFO RELATING TO THE IDENTITY OF A CLIENT MAY FALL WITHIN THE AMBIT OF THE PRIVILEGE WHEN THE CLIENTS NAME ITSELF HAS AN INDEPENDENT SIGNIFICANCE, SUCH THAT DISCLOSURE WOULD THEN REVEAL CLIENT CONFIDENCES. EXCEPTIONS APPLIED IN THE CASE AT BENCH **the circumstances involving the engagement of lawyers clearly reveal that the INSTANT CASE FALLS UNDER THE 2 EXCEPTIONS MENTIONED. First exception (I think this is the 4th exception mentioned above) disclosure of the alleged clients name would lead to establish said clients connection with the very fact in issue of the case, which is privileged info, bec the privilege as stated earlier, protects the subject matter or substance (w/o which there would be no atty-client relationship) The link bet the alleged crim offense and the legal advice or legal service sought was duly established in the case at bar, by PCGG. The key lies in the 3 specific conditions (refer to Fact No. 7) laid down by PCGG which constitutes petitioners ticket to non-prosecution should they accede thereto. From these conditions, particularly the 3rd we can readily deduce that the clients indeed consulted the petitioners in their capacity as lawyers, regarding the financial corporate structure framework, and set up of the corpos in question. In turn, petitioners gave their professional advice in the form of deeds of assignment covering their clients shareholdings. Preparation of the docus was part and parcel of ACCRA lawyers legal service to their clients. It constituted an integral part of their duties as lawyers. They have a legit fear that identifying their clients would implicate them in the very activity for which legal advice had been sought

2.

THE GENERAL RULE: as a matter of policy, a clients identity should not be shrouded in mystery. Lawyer may not invoke the privilege and refuse to divulge the name or identity of his client. WHY? There are 5 reasons: a. the court has a right to know that the client whose privileged comm. Is sought to be protected is flesh and blood. b. The privilege begins to exist only after the attyclient relationship has been established. The atty client privilege does not attach until there is a client. c. Privilege generally pertains to the subject matter of the relationship d. Due process considerations require that the opposing party should as a general rule, know his adversary. A party suing or sued is entitled to know who his opponent is. He cannot be obliged to grope in the dark against unknown force.

the alleged accumulation of ill gotten wealth in the aforementioned corpos. Next exception (this is the 3rd main exception mentioned above) revelation of the clients name would obviously provide the necessary link for the prosecution to build its case, where non otherwise exists. It is the link that would inevitably form the chain of testimony necessary to convict the client of a crime. Here, PCGG wanted to establish thru ACCRA lawyers that Mr. COjuangco is their client and it was him who furnished all the monies to the subscription payment. Hence, the ACCRA lawyers acted as dummies, nominees, and/or agents by allowing themselves to be used as instrument in accumulating ill gotten wealth thru govt concessions. there are alternative sources of info available to the prosecutor which do not depend on utilizing a defendants counsel as a convenient and readily available source of info. Compelling disclosure of the clients name in circums here, amounts to sanctioning fishing expeditions by LAZY prosecutors and litigants which the SC will not allow (hehe!) the crux of the petitioners objections ultimately hinges on their expectation that if the prosecution has a case against their clients, the latters case should be built upon evidence painstakingly gathered by them from their own sources and not from compelled testimony requiring them to reveal the name of their clients, info which unavoidably reveals much about the nature of the transaction which may or may not be illegal. The uberrimei fidei relationship bet the lawyer and client therefore imposes a strict liab for negli on the former.

to the PCGG and the court; but this only if they so choose in order to be dropped from the complaint such identification being the condition under which the PCGG has expressed willingness to exclude them from the action. The revelation is entirely optional, discretionary on their part. (diba may point si lolo hilario?!) the inclusion of the ACCRA lawyers is justified by Rule 110, Sec. 2 which requires that the complaint or info should be against all persons who appear to be responsible for the offense involved.

Puno: it is noteworthy that ACCRA lawyers were included as defendants as conspirators. They were charged with having conspired and confederated with each other in setting up through the use of coco levy funds the corpos. The issue here poses a TRILEMMA for its resolution. One problem: need for courts to discover the truth. 2nd problem: need to protect the adversary system of justice where truth is best extracted by giving a client broad privilege to confide facts to his counsel. 3rd problem: need to keep inviolate the consti right against self incrimination and right to effective counsel To bridle at center the centrifugal forces of these policy considerations, courts have followed the prudential priciplae that atty-client privilege must not be expansively construed as it is in derogation of the search for truth

SEPARATE OPINION: Vitug: I find it unreasonable for the Sandiganbayn to compel petitioners to breach the trust reposed on them and succumb to a thinly disguised threat of incrimination. Situation here is the RP attempts to establish a case not on what it perceives to be the strength of its own evidence but on what it could elicit from a counsel against its client DISSENTING OPINIONS: Davide: (I think he gave a good argument) the prerogative to determine who shall be made defendant in a civil case is initially vested in the plaintiff. The control of the court comes in only when the issue of interest, i.e. whether an indispensable party has not been joined or whether there is misjoinder of parties. If they wanted to be excluded, then gayahin nila si Roco, at the least or they should have filed a motion to dismiss (Rule 16, Sec. 1 di minention ni Davide which ground though, at wala na kong panahon mag-isip hehe kayo na magjudge which ground. Pero love ko pa rin si Sir Leonen. =)). The rule of confidentiality under the lawyer client relationship is not cause to exclude a party. It is merely a ground disqualification of a witness (Rule 130, Sec. 24) and may only be invoked at the appropriate time, i.e. when a lawyer is under compulsion to answer as witness, as when having taken the witness stand, he is questioned as to such confidential communication or advice or is being otherwise judicially coerced to produce, through subpoena duces tecum, or otherwise letters or other documents containing the same privileged matter. But not of the lawyers in this case is being required to testify about or otherwise reveal any confidential communication made by the client to him, or his advice given thereon in the course of or with a view to professional employment. What they are being asked to do is to identify the clients

Lawyer client relationship cannot exist for the purpose of counsel in concocting crime. Communications to an atty having for their object the commission of a crime partake the nature of a conspiracy and it is not only lawful to divulge such communication, but under certain circums, it might become the duty of the atty to do so. In the well chosen words of Justice Quiason, THE LAWYER IS NOT A GUN FOR HIRE. (but there is a disclaimer stated by Puno mere allegation that a lawyer conspired with his client to commit a crime or a fraud will not defeat the privilege but then again he went on saying that to drive the privilege away, there must be something to give color to the charge; there must be a prima facie evidence that it has foundation in fact and in this case, PCGG has alleged that they are coconspirators.) BUT ASSUMING THAT ACCRA LAWYERS MAY INVOKE THE PRIVILEGE, there is a general rule (refer to the general rule above) and exceptions. For exceptions to apply, the person claiming under the exception has the oblig to present the underlying facts demonstrating the existence of the privilege. When these facts can be presented only by revealing the very info sought to be protected by the privilege, the procedure is for the lawyer to move for an inspection of the evidence in an in camera hearing or exparte. ** in the case at bar it cannot be gainsaid that ACCRA lawyers have not adduced evidence that they fall within any of the above mentioned exceptions. The first and third exception relied upon by the majority are not self executory and needs factual basis for their successful invocation.

This part is just an extra, some kinda academic discussion re: atty-client privilegeessentially cut and paste just in case Maam asks of the historical background ng privilege. sorry cut and paste talaga di na gumagana isip ko eh =( the nature of lawyer-client relationship is premised on the Roman law concepts of locatio conductio operarum (contract of lease of services) where one person lets his

10

services and another hires them w/o reference to the object of which the services are to be performed wherein lawyers services may be compensated by honorarium or for hire a mandato (agency contract) wherein a friend on whom reliance could be placed makes a contract in his name, but give up all that he gained by the contract to the person who requested him. But the lawyer client relationship is more than that of the principal-agent and lessor-lessee in modern day perception of the lawyer client relationship, an atty is more than a mere agent of servant, bec. He possesses special powers of trust and confidence reposed on him by his client. A lawyer is also as independent as the judge of the court, thus his powers are entirely diff from and superior to those of an ordinary agent. Atty also occupies what may be considered as a quasi judicial office since he is fact an officer of the court and exercise his judgment in the choice of courses of action to be taken favourable to his client. Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith, that is required by reason of necessity and public interest based on the hypothesis that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice.

him. Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client: The lawyer owes "entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability," to the end that nothing be taken or be withheld from him, save by the rules of law, legally applied. No fear of judicial disfavor or public popularity should restrain him from the full discharge of his duty. In the judicial forum the client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land, and he may expect his lawyer to assert every such remedy or defense. But it is steadfastly to be borne in mind that the great trust of the lawyer is to be performed within and not without the bounds of the law. The office of attorney does not permit, much less does it demand of him for any client, violation of law or any manner of fraud or chicanery. He must obey his own conscience and not that of his client. Considerations favoring confidentiality in lawyer-client relationships are many and serve several constitutional and policy concerns. In the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If a client were made to choose between legal representation without effective communication and disclosure and legal representation with all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the right to counsel. If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed thereby rendering the right practically nugatory. The threat this represents against another sacrosanct individual right, the right to be presumed innocent is at once self-evident. Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would otherwise be circumscribed by limited information engendered by a fear of disclosure. An effective lawyer-client relationship is largely dependent upon the degree of confidence which exists between lawyer and client which in turn requires a situation which encourages a dynamic and fruitful exchange and flow of information. It necessarily follows that in order to attain effective representation, the lawyer must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility. LICHAUCO v. ATLANTIC GULF FACTS: Appellant Atlantic, Gulf and Pacific Company of Manila (Atlantic) is a foreign corporation duly registered and licensed to do business in the Philippines, with its office and principal place of business in Manila. Richard T. Fitzsimmons (Fitzsommons) was the president and one of the largest stockholders of Atlantic when the Pacific war broke out on December 8, 1941. o He was receiving a salary of P3,000 a month. o He held 1,000 shares, of which 545 shares had not been fully paid for, but for which he had executed promissory notes in favor of Atlantic for P245,250, at P450/share. o In 1941, the sum of P64,500 had been credited in his favor on account of the purchase price of the 545 shares out of bonuses and dividends.

It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in society. This conception is entrenched and embodies centuries of established and stable tradition. In Stockton v. Ford, the U.S. Supreme Court held: There are few of the business relations of life involving a higher trust and confidence than that of attorney and client, or generally speaking, one more honorably and faithfully discharged; few more anxiously guarded by the law, or governed by the sterner principles of morality and justice; and it is the duty of the court to administer them in a corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it. In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by the Philippine Commission on August 7, 1901. Section 383 of the Code specifically forbids counsel, without authority of his client to reveal any communication made by the client to him or his advice given thereon in the course of professional employment. Passed on into various provisions of the Rules of Court, the attorneyclient privilege can be seen in Rule 130, Sec. 24 (b) Further, Rule 138 of the Rules of Court states: Sec. 20. It is the duty of an attorney: (e) to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his clients business except from him or with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility which provides that: Canon 17. A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in

11

A. B.

Under his agreements with the company dated April 4 and July 12, 1939, should he die without having fully paid for the 545 shares of stock, Atlantic, at its option, may either reacquire the 545 shares by returning to his estate the amount applied, or issue in favor of his estate the corresponding number of the company's shares equivalent to the amount paid at P450/share. After the Japanese occupied Manila in January 1942, it seized and took possession of the office and all the properties and assets of Atlantic all its officials, they being American citizens. Fitzsimmons died on June 27, 1944, in the Santos Tomas interment camp (ST), and special proceeding was subsequently instituted in the CFI of Manila for the settlement of his estate. Atlantic resumed business operations in March 1945. Atlantic filed a claim against the estate of Fitzsimmons which, as amended, consisted of the following items: o Personal overdraft of Fitzsimmons account: P63,000.00 Charges from San Francisco (SF) not included in above figure A as (P1,002), less subsequent credit (P133.33) with Atlantic in current agent of the company of November 30, 1945 advice from SF agent

Atlantic offered to require the 545 shares sold to Fitzsimmons upon return to his estate of the amount of P64,500 paid, and asked the court to authorize the setoff of the amount of its claim of P63,868.67 from the amount of P64,500 returnable to the estate. In his answer to the amended claim, the administrator denied the alleged indebtedness of Fitzsimmons to Atlantic, expressed his conformity to the refund of P64,500 by Atlantic to the estate and the retransfer by the latter to the former of the 545 shares of stock, and set up a counterclaim of P90,000 for salaries allegedly due the deceased from the claimant corresponding to the years 1942, 1943, and the first half of 1944, at P36,000 per annum.

ISSUES/HOLDING:

1. 2.

Whether appellant's claims of P63,000 and P868.67 have been established by satisfactory evidence. NO and YES, respectively. Whether Fitzsimmons was entitled to his salary as president of Atlantic from January 1942, to June 27, 1944, when he died in ST. NO. I Upon the claim of P63,000, the evidence for the claimant consisted of the testimony of Santiago Inacay (Inacay) and Modesto Flores (Flores), chief and assistant accountant, respectively, of Atlantic. Inacay o Personal account of Fitzsimmons, as of the last statement of account rendered in the year 1941 was around P63,000. o The last statement of account rendered to Fitzsimmons was that of November, 1941, the office of the company having closed on December 29, 1941. o Asked how it was possible for him to remember the status of the personal account of Fitzsimmons: I have to remember it because it is very shameful xxx when the officers xxx ask me about their balance, I could not tell them the amount xxx. o Asked what would happen at the end of each year to the personal account, and to the status of the

RATIO:

personal account of Fitzsimmons: At the each year, after the declaration of dividends on paid shares, bonuses and directors' fees, the account will balance to a credit balance. o On cross-examination, admitted that he could not recollect the amount of the balance, either debit or credit, of each of the Americans and other employees who maintained a current account with the company o On redirect examination, he explained that he remembered the balance of Fitzsimmons because xxx I should have knowledge more or less, of the status of the account of the president, the treasurer, and the rest of the directors. Flores o Fitzsimmons had an account consisting of cash advances and of payments for his account xxx for his personal use. o On the credit side of his account were entered his monthly salaries, dividends declared, bonuses, and director's fees. o When Fitzsimmons withdrew funds by way of cash advances, he signed receipts which were delivered to the cashier, who in turn delivered them to him. o When creditors of Fitzsimmons presented bills to the accounting department for payments, those bills were approved by Fitzsimmons and the company paid them and charged them to his account. o All the books, receipts, papers, documents, and accounts referring to Fitzsimmons were lost during the war. o The personal account of Fitzsimmons on December 29, 1941, was on the debit side, amounting to P63,000 more or less, according to his best recollection. o On cross-examination, he testified that in the absence of the records he could not state what part of the P63,000 represented cash advances and payments made by the company to the creditors of Fitzsimmons. Testimonies of Mr. Henry J. Belden (Belden) and Mr. Samuel Garmezy (Garmezy), vice-president-treasurer and president, respectively, of Atlantic were objected to by the administrator and the trial court refused to admit their testimony on the ground that they were incompetent under section 26(c) of Rule 123, they being not only large stockholders and members of the board of directors but also vice-president-treasurer and president, respectively, of Atlantic. o Counsel for Atlantic stated in the record that Belden, if permitted to testify, would testify: That Fitzsimmons, xxx, had a current account xxx which, upon the outbreak of the war in December, 1941, had a debt balance against him of P63,000, and that said sum or any part had not been paid. o With regard to Garmezy, counsel for Atlantic also said that if said witness were allowed to testify, he would testify: That xxx during the last days of November, or the first days of December, 1941, he received a copy of the trial balance sheet, and xxx the personal accounts of each and every one of the officers of Atlantic including himself, and also Fitzsimmons, appear; and that xxx on that occasion he checked up his own personal record with the entries appearing xxx, and he then had occasion to find out that the account of Fitzsimmons xxx was a debit account in the amount of around P63,000, while the personal account of Garmezy, xxx, showed a credit account in the sum of P63,000; and that this account P63,000 owed by Fitzsimmons appeared in

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that trial balance, xxx, was not paid by Fitzsimmons until the present date. o The offers of proof were ratified by the witnesses Belden and Garmezy and made of record by the trial court. The evidence for the administrator against this claim of P63,000 consisted of Exhibit 1 and the testimony of Mr. Marcial P. Lichauco (Lichauco) explaining the circumstances under which said document was prepared and signed by the Fitzsimmons. o On December 15, 1942, Fitzsimmons sued his wife Miguela Malayto (Malayto) for divorce in the CFI of Manila. On August 9, 1943, the court rendered judgment granting plaintiff's petition and ordering the dissolution of the marriage. Lichauco represented the plaintiff. After the decree of divorce had become final, Fitzsimmons submitted to the court an inventory of the assets and liabilities of the conjugal partnership, with a proposed adjudication or division of the net assets among the ex-spouses and their children. A carbon copy of said inventory, signed by Fitzsimmons on November 9, 1943, and filed in the CFI of Manila was presented by the administrator as Exhibit 1 and admitted by the trial court over the objection of the claimant. Lichauco testified that he prepared the inventory from the data furnished by Fitzsimmons after he had conferred with and explained to the latter why it was necessary; that since Fitzsimmons was married to Malayto in the year 1939, he had to include all the properties acquired by him between the date of his marriage and the date of his divorce, and that all the obligations incurred by him and not yet paid during the same period should be included because they had to be deducted from the assets in order to determine the net value of the conjugal properties; that he made it very clear to Fitzsimmons that he should not forget the obligations he had because they would diminish the amount his wife was going to receive, and that any obligation not included in the inventory would be borne by him alone after his wife had received her share. o According to Exhibit 1 the gross value of the assets of the conjugal partnership between Fitzsimmons and Malayto as of November, 1943, was P174,700, and the total amount of the obligations was P30,082. These obligations consisted of only two items, one of P21,426 in favor of the Peoples Bank and Trust Company (PBTC) and another of P8,656 in favor of the Philippine Bank of Commerce (PBC). No obligation in favor of Atlantic was listed in Exhibit 1. And upon that fact the administrator based his opposition to the claim in question. It necessary for us to pass upon the trial court's rejection of the testimonies of Belden and Garmezy and its admission of Exhibit 1. o WON the officers of a corporation party to an action against an executor or administrator of a deceased person are disqualified from testifying as to any matter of fact occurring before the death of such deceased person, under Rule 123, section 26(c), of the Rules of Court, which provides: Parties or assignors of parties to a case, or persons in whose behalf a case is prosecuted, against an executor or administrator or other representative of a deceased person, or against a person of unsound mind, upon a claim or demand against the estate of such deceased person or against such person of unsound mind, cannot testify as to any matter of fact occurring before the death of such deceased person or before such person became of unsound mind.

This provision was taken from section 383(7), of our former Code of Civil Procedure, which was derived from section 1880 of the Code of Civil Procedure of California. o City Savings Bank vs. Enos: The provision applies only to parties or assignors of parties, xxx. xxx, interest no longer disqualifies under our law, xxx. xxx section 14, Civ. Code, xxx "person" includes a corporation; xxx, as the corporation can only speak through its officers, the section must be held to apply to all who are officially related to the corporation. A corporation may be conceded to be a person, xxx. To hold that the statute disqualifies all persons from testifying who are officers or stockholders of a corporation would be equivalent to materially amending the statute by judicial interpretation. Plainly the law disqualifies only "parties or assignors of parties," and does not apply to persons who are merely employed by such parties or assignors of parties. o Merriman vs. Wickersman: xxx, vice-president and one of its principal stockholders, was allowed to testify to matters and facts in issue. It is contended that the evidence was improperly admitted, in violation of section 1880 of the Code of Civil Procedure, xxx. At common law, interest disqualified any person from being a witness. That rule has been modified by statute. In this state, interest is no longer a disqualification, and the disqualifications are only such as the law imposes. An examination of the authorities from other states will disclose that their decisions rest upon the wordings of their statutes, but that generally, where interest in the litigation or its outcome has ceased to disqualify, officers and directors of corporations are not considered to be parties within the meaning of the law. o Our own statute xxx neither disqualifies parties to a contract nor persons in interest, but only parties to the action; xxx our statute does not exclude from testifying a stockholder of a corporation, whether he be but a stockholder, or whether, in addition, he be a director or officer. o The appellee admits xxx where the "dead man's statute" disqualifies only parties to an action, officers and stockholders of the corporation have been allowed to testify in favor of the corporation, while xxx where "parties and persons interested in the outcome of the litigation" are disqualified under the statute, officers and stockholders of the corporation have been held to be incompetent to testify against the estate of a deceased person. o Inasmuch as section 26(c) of Rule 123 disqualifies only parties or assignors of parties, we are constrained to hold that the officers and/or stockholders of a corporation are not disqualified from testifying, for or against the corporation which is a party to an action upon a claim or demand against the estate of a deceased person, as to any matter of fact occurring before the death of such deceased person. o The trial court erred in not admitting the testimony of Belden and Garmezy. It is not necessary, however, to remand the case because their testimonies would be merely corroborative, and if permitted, already appears in the record and we can consider it together with the testimony of the Inacay and Flores who were "the only ones in the best of position to testify on the status of the personal account" of the Fitzsimmons. WON Exhibit 1 is admissible. o

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Appellant contends that it is a self-serving declaration, while appellee contends that it is a declaration against interest. A self-serving declaration is a statement favorable to the interest of the declarant. It is not admissible in evidence as proof of the facts asserted. "The vital objection to the admission of this kind of evidence is its hearsay character. Furthermore such declarations are untrustworthy; to permit their introduction in evidence would open the door to frauds and perjuries." A declaration against the interest of the person making it is admissible in evidence, notwithstanding its hearsay character, if the declaration is relevant and the declarant has died, become insane, or for some other reason is not available as a witness. "The true test in reference to the reliability of the declaration is not whether it was made ante litem motam, as is the case with reference to some classes of hearsay evidence, whether the declaration was uttered under circumstances justifying the conclusion that there was no probable motive to falsify." We find no merit, that Exhibit 1 was a declaration against the interest of Fitzsimmons. He having since died and therefore no longer available as a witness, said document was correctly admitted by the trial court in evidence.

II There was no resolution either of the stockholders or the board of directors of the company authorizing the payment of the salaries of the president or any other officer or employee of the corporation for the period of the war when the corporation was forced completely to suspend its business operations and when its officers were interned or virtually held prisoners by the enemy. The theory of the appellee, which was sustained by the trial court, is that as long as a corporation officer with a fixed salary retains the office, he is entitled to that salary notwithstanding his inability to perform his duties. o The main case cited by the appellee in support of his theory is Brown vs. Galvenston Wharf Co.: The president of the defendants corporation claimed his salary for a period of almost eleven months, during which he was on an indefinite leave of absence, and the court allowed it, holding that "so long as he remained the president of the company, the salary was an incident to the office, and ran with it for the whole time, although he may have failed to perform the duties of president for any given part of such time." o If such a sweeping pronouncement is to be applied regardless of WON the corporation was in operation during the period covered by the claim for the salary, we cannot subscribe to it. o We know of no principle of law that would authorize the court to compel a corporation, which for a long period was not in operation and did not receive any income, to pay the salaries of its officers during such period, even though they were incapacitated and did not perform any service. To do so would be tantamount to depriving the corporation or its stockholders of their property without due process of law. o The resolutions of the stockholders are invoked by the appellee to support the proposition that Fitzsimmons, during his internment, performed certain acts as president of the corporation, which were ratified and confirmed by the stockholders in their annual meeting on January 21, 1946. But those acts consisted merely of borrowing money for himself and the other officers of the corporation and their respective families to enable them to eke out an existence during their internment. The ratification of those acts by the stockholders had for its purpose to relieve Fitzsimmons of personal liability for the obligations thus contracted by him in the name of the company. To say that by ratifying those acts of Fitzsimmons the corporation became obligated to pay his salaries during his internment aggregating P90,000, would be the height of absurdity. o We are of the opinion that the estate of Fitzsimmons is not entitled to its counterclaim of P90,000 or any part thereof. GOI v. CA

Neither counsel for the appellant nor counsel for the appellee pursued the examination of the witness to determine, if possible, the approximate amount of the dividends, bonuses, and director's fees that would have been credited to Fitzsimmons as of the end of the year 1941. But enough appears in the testimony to warrant the deduction that had the war not forced the corporation to close office on December 29, 1941, dividends, bonuses, and director's fees for the year 1941 would, as of the and of that year, have been declared and credited to the account of Fitzsimmons, which as in previous years would or might have brought that account on the credit side. We are confronted only by the oral testimony of the witnesses for the claimant based entirely on their memory as to the status of Fitzsimmons' account, and not on the other by Exhibit 1. Realizing the frailty and unreliability of human memory, we find no sufficient basis upon which to reverse the trial court's finding that this claim had not been satisfactorily proven. With reference to the item of P868.67, we find it to have been sufficiently proven by Inacay and Flores, supported by documents which establish the fact that in November and December, 1941, the SF agent of the company deposited in the Crocker First National Bank of SF (Crocker) the total sum of $500 to the account of Fitzsimmons, which agent debited against the company. Debit notices of the deposits were not received by the company until after the liberation. o The administrator admitted in his testimony that after the death of Fitzsimmons, he received from Crocker the balance of Fitzsimmons' account in the sum of P1,788.75. Aside from that debit of P1,000 against Atlantic for the account of Fitzsimmons, the agent also paid $1 or P2 for Fitzsimmons' subscription to the SF Chronicle, making a total of P1,002. From this was deducted a credit of P133.33, consisting of a payment made on June 30, 1946, by a creditor of Fitzsimmons named J. H. Chew as testified to by Flores and supported by Exhibit E, leaving a balance of P868.67. o The trial court therefore erred in not allowing said claim.

DOCTRINE: Here, the protection still stands, even if the suit is against the heirs of the deceased. Rationale for the Survivorship Disqualification Rule/Dead Man Statute (Rule 130.20a): to guard against the temptation to give false testimony in regard to the transaction in question on the part of the surviving party to put the two parties to a suit upon terms of equality in regard to the opportunity of giving testimony designed to close the lips of the party-plaintiff when death has closed the lips of the party-defendant, in order to remove from the surviving party the temptation to

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falsehood and the possibility of fictitious claims against the deceased FACTS: Vendor: TABACALERA Vendee: Praxedes Villanueva (+) and Joaquin Villegas Guarantor: Gaspar Vicente It all started with a contract of sale of three haciendas in Negros Oriental. This sale was guaranteed by Vicente. Thereafter, a contract of promise to sell was executed by Villanueva in favor of Vicente for some fields in one of the haciendas. This agreement was reduced to writing and signed by Goi as Villanuevas agent. After this contract of promise to sell was executed, Villanueva was able to raise funds to pay for the fields he promised to sell to Vicente. Villanueva then went to Vicente to rescind the contract of promise to sell. BUT: The consideration (PhP12,460.24) had already been paid to TABACALERA, so they VERBALLY agreed to instead lease to Vicente the fields for a period of five years, the rent to be deducted from the PhP12, 460.24. Eventually, formal deeds of sale were executed by TABACALERA in favor of Villanueva. Some fields were also mortgaged to RFC. Villegas was also able to procure a title to the field appertaining to him. Vicente continued to be in possession of two of the fields subject of the contract of promise to sell. Then, Villanueva died. In the intestate proceedings, the fields in Vicentes possession were included in the inventory. Before the intestate proceedings could come to a close, Vicente instituted the present action for recovery of property and damages based on the written contract of promise to sell. TC & CA: ruled in favor of Vicente SC: reversed the lower courts decision. The contract of promise to sell was novated by the verbal contract of lease. ISSUES & RATIO:

Corollary: Vicente is competent to testify to transactions or communications with the deceased which were made with an agent of the deceased. In this case, Goi. BUT: The testimony is confined to those transactions and communications had with the agent. (This is actually what proved the novation of the written contract of promise to sell) Since the agent, Goi was available to testify, the inequality sought to be avoided by the Dead Man Statute was actually inexistent in this case. The Courts pronouncements are confusing. But I still conclude that the protection is availing since it was categorically stated. The corollary on the agent merely shows that the evil sought to be avoided by the Rule is inexistent. (rom)

2.

Can a written promise to sell be novated into a verbal agreement of lease during the promissors (Villanueva) lifetime? YES. This was sufficiently proven by Gois testimony and subsequent acts of the parties. ONG CHUA v. CARR -Appeal; CFI judgment -Axn for Reformation FACTS: 1. Axn for Reformation was brought by seller Ong Chua when he found out that the Deed of Sale between him and Carr did not contain the conditions in reference to Tecks right to repurchase the property, contrary to assurance made to him by Moore (lawyer/notary). 2. Defendant filed an answer, setting up spcl defenses that: the deed in question contained no stipulation as to rights of repurchase and that if there was any agreement or promise on the part of the defendant to convey the property to sps Teck and Lim or the the plaintiff, as alleged in the complaint, such agreement and promise was for the sale of real property, or an interest therein, and that neither said agreement or promise, nor any note or memorandum was made in writing or subscribed by the defendant or by any authorized person for him 3. Subsequent to the filing of the answer, Carr died. The administrator of his estate, Manuel Igas, was substituted as defendant. 4. At the trial, the court permitted Ong Chua to testify, over the defendants objections, to facts occurring prior to the death of the defendant Carr. 5. No evidence was offered by the defendant, and consequently, the facts alleged by the plaintiff stand uncontradicted. 6. Upon such facts, the court ordered reformation. 7. Administrator appealed. ISSUE: WON the court erred in permitting the plaintiff, Ong Chua, to testify, over the defendants objections, to facts occurring prior to the death of the defendant Carr HELD: NO RATIO:

1.

Can Vicente testify on matters of fact occurring before Villanuevas death, which constitutes a demand upon his estate? NO. This case was instituted against the heirs of the deceased. remains within the ambit of the protection WHY? The heirs are the representatives of the deceased. 1. they succeeded to the decedent's right by descent or operation of law 2. they are so placed in litigation that they are called on to defend what they have obtained from the deceased they have to make the defense which the deceased might have made if living they have to establish a claim which the deceased might have been interested to establish, if living BUT: The protection was waived. 1. the heirs counsel cross-examined Vicente 2. they filed a counterclaim against Vicente. When Vicente testified, it was in a dual capacity, plaintiff and defendant. As defendant in the counterclaim, Vicente was not disqualified from testifying as to matters of fact occurring before Villanuevas death.

Basis for the objection: subsection 7 of sec 383, Code of Civil Proc (now Rule 130 sec 23 aka the Dead Mans Statute) w/c bars ptys to an axn or proceeding against an executor or administrator or other representative of a deceased person upon a claim or demand against the estate of such deceased person from testifying as to any

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matter of fact occurring before the death of such deceased person Rule has generally been given a liberal construction to promote justice, and it is held that it was never intended to serve as a shield for fraud Jones on Evidence: The evidence of an adverse party is absolutely excluded by an independent, affirmative enactment making him incompetent as to transactions or communications w/ a deceased or incompetent person These statutes, however, do not render the adverse party incompetent to testify to fraudulent transactions of the deceased, as the statutes are not designed to shield wrongdoers but the courts can compel the adverse party to clearly establish the alleged fraudulent acts before admitting such testimony Tongco vs Vianzon: Counsel is eminently correct in emphasizing that the object and purpose of this statute is to guard against the temptation to give false testimony in regard to the transactions in question on the part of the surviving party. He has, however, neglected the equally important rule that the law was designed to aid in arriving at the truth and was not designed to suppress the truth. Present case: a number of credible witnesses testified to facts w/c conclusively showed that Carrs conduct was tainted w/ fraud The plaintiff did not take the witness stand until after the existence of fraud on the part of Carr had been established beyond a doubt and not by a mere preponderance of evidence In these circumstances, we cannot hold that the trial court erred in not excluding the plaintiffs testimony MEDEZONA v. VDA DE GOITIA (APPELLANT)

your shares? He sent me nothing, nor did he answer, my letters. 3. Did you ever ask him to send you a statement of your account? Yes, several times by letter, but I never received an answer.

ISSUE:

WON questions 2 and 3 of the deposition should be inadmissible? NO, disqualification by reason of death does not apply

RATIO: The first question tends to show the relationship between the principals and their atty-in-fact Benigno Goitia up to 1914 o Supposing it was error to permit the question, it wouldnt be a reversible error, for that relationship is proved by other evidence 2 other questions o Deponents deny having received from the deceased Benigno Goitia any money on account of profits on their shares since 1915 SC: claimants denial that a certain fact occurred before the death of their atty-in-fact does not come within the legal prohibition (Sec 383, No 7, Code of Civ Pro) o The law prohibits a witness directly interested in a claim against the state of a decedent from testifying upon a matter of fact wc took place before the death of the deceased o The underlying principle of this prohibition is to protect the intestate estate from fictitious claims o But this protection should not be treated as an absolute bar or prohibition from the filing of just claims against the decedents estate

FACTS: Mendezona and Izaguirre filed separate claims against the intestate estate of Benigno Goitia for P5940 and P2376, respectively, as dividends from their partnership Tren de Aguadas TC found: o Benigno Goitia was the representative and atty-infact of the plaintiffs in the joint account partnership known as Tren de Aguadas o Mendezona owns 180 shares, Izaguirre owned 72 shares o Prior to 1915, Benigno collected the dividends for the plaintiffs which he remitted to them every year o From 1915 up until his death in 1926 he failed to remit the dividends Depositions of Mendezona and Izaguirre made before the American consul at Bilbao, Spain in accordance with the Code of Civil Procedure Appellants counsel was notified of these depositions and he didnt suggest any other interrogatory in addition to the questions of the committee When these depositions were read in court, the defendant objected to their admission. Objected to the ff questions: o 1. Did Mr. Benigno Goitia render you an account of your partnership in the Tren de Aguadas? Yes, until the year 1914 o 2. From the year 1915, did Mr. Benigno Goitia send you any report or money on account of profits upon

SC compared the case to Maxilom vs. Tabotabo o Facts: M liquidated his accounts with the deceased T during his lifetime with the result that there was a balance in favor of M in the amount of P312 Mexican currency M and T signed the liquidation M later filed a claim against the estate of T for P1062 alleging that P750 which included the liquidation had not really been received Therefore, instead of only P312, liquidation shouldve shown a balance of P1062 in Ms favor o Held: in view of the prohibition in Sec 383, M couldnt testify in his own behalf against the estate of T so as to alter the balance of the liquidation made by and between himself and the decedent o Vis--vis this case: there has been no liquidation between the claimants and the deceased Goitia. Claimants testify denying any such liquidation. To apply to them the rule that if death has sealed the lips of one of the parties, the law seals those of the other, would be to exclude all possibility of a claim against the testamentary estate. We do not believe that this was the legislators intention. Claimants did not testify to a fact which took place before their representatives death, but on the contrary denied that it had taken place at all, i.e. they denied that a liquidation had been made or any money remitted on account of their shares in the Tren de Aguadas which is the ground for their claim o Incumbent upon appellant to prove by proper evidence that the affirmative proposition was true, either by bringing into court the books wc the attyin-fact was in duty bound to keep, or by introducing copies of the drafts kept by the bank wc drew them, as was the decedents usual practice

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Appellant admits having found a book of accounts kept by the decedent showing an item for P90 for the account of Mendezona and P36 for the account of Izaquirre, wc agrees by the statement of Santos (succeeded Goitia in the administration of the partnership) that the deceased had collected the amounts due the claimants as dividends on their shares for the months of May and June 1926, amounts wc had not been remitted by the deceased to the claimants BABAO v. PEREZ

Plaintiff: Bienvenido Babao, judicial administrator of the estate of Santiago Babao Defendant: Florecio Perez, judicial admisntrator of the estate of Celestina Perez Other defs: purchasers & actual owners of the portions of the land Ps version: Celestina Perez was the owner of the land which was not registered either under Act 496 or under the Spanish Mortgage law in 1924 when the deceased Babao married Maria Cleofe Perez, niece of Celestina Perez, the latter and the former entered into a verbal agreement whereby Santiago Babao bound himself to improve the land and to act at the same time as administrator thereof during the lifetime of Celestina Perez o all expenses for labor, and materials to be at his cost, in consideration of which Celestina in turn bound herself to convey to Santiago Babao or, his wife, the land, together with all the improvements thereon upon her death thus, Babao left his job (he earned P150/mo) & stared leveling & clearing the land only leaving 50 hectares unimproved all of wc he administered from 1924-1946 for clearing and improving the portions of land above-mentioned, he incurred expenses amounting to P7,400 which added to his salary as administrator from l924 to 1946 at rate P150 a month mounting to P39,600 = total P47,000 In violation of the verbal agreement, Celestina Perez, acting through Leovigildo Perez, to whom she extended a power of Attorney to sell, sold few days before she died about 127 hectares of the land, thereby depriving Santiago Babao of the possession and administration thereof from 1945. Celestina Perez died on August 24, 1947 & intestate proceedings were instituted Santiago Babao died on January 6, 1948 & estate proceedings were instituted P defense: sales are fictitious and in clear violation of the oral agreement, thus theyre null and void o Estate wld suffer damage of P366,700 representing fruits it failed to rcve during the last 20 yrs Defs: denied that a verbal agreement was entered into & denied that Santiago Babao had actually cleared and improve a great portion thereof at the cost at around P7,400. alleged that in 1924 (& yrs b4 that) the land had already been cleared and cultivated for agricultural purposes with an exception of a portion of 50 hectares by Celestinas husband & thru the trusco sys used where persons/tenants where allowed to clear & plant the land & from the harvest were compensated accdg to a graduated scale of division varying from year to year only when Celestinas husband died in 1930, that Santiago Babao began administering the land until 1935 when Celestina went to live with her nephew Bernardo Perez until her death in 1947

since then Celestina prohibited Santiago from interfering with the administration of the land and designated another person in his place, and for the work he did from 1930 to 1935, he was more than compensated because the proceeds of the harvests during said years were all given only to him and his wife and Celestina was given only what was barely sufficient for her maintenance. the sales made by Celestina through her attorney-infact Leovigildo Perez were not fictitious but were made with full knowledge and authority of Celestina who executed in favor of Leovigildo Perez a power of Attorney under the authority notary public in the presence of Santiago Babao o sales are real, valid and genuine, having been executed in accordance with law LC: ruled in favor of P sales were fictitious, null & void; defs shld surrender the possession of the half adjudicated and vested in favor of the plaintiff CA: reversed the LC & dismissed the case but this was set aside by the sme Ct for being rendered wo J since the amnt involved was more than 50k o Case was remanded Ps atty filed a MTD stating the verbal agreement was enforceable under the Statute of frauds. o TC: denied the motion; Statute of frauds cant be invoked since the performance by 1 party of his part of the contract takes the case out of the statute and Santiago had fully complied w his part of the contract o Bec of this ruling, when the case was tried on the merits, the Ct overruled the intro of oral testimony to prove the alleged verbal agreement I: WON the alleged verbal agreement falls w/in the prohibition of the Statute of frauds A1403, CC: In the following cases an agreement hereafter made shall be enforceable by action unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged or by his agent, evidence therefore, of the agreement cannot be received without the writing, or secondary evidence of its contents; o (a) An agreement that by its terms is not to be performed within a year from the making thereof. o (e) An agreement . . . for the sale of real property or of an interest therein. Appellants: the verbal agreement falls under the pars (a) and (e) bec it may be considered as an agreement which by its terms is not to be performed within one year from the making thereof, or one which involves a sale of real property or of an interest therein. o As such, the TC erred in allowing the introduction of PE to prove the alleged agreement over the objection of appellants

CT: in order that a partial performance of the contract may take the case out of the operation of the statute, it must appear clear that the full performance has been made by one party within one year - otherwise the statute would apply. Thus, the rule on this point is well stated in Corpus Juris in the following wise: o All that is required in such case is complete performance within the year by one party, however many years may have to elapse before the agreement is performed by the other party. But nothing less than full performance by one party will suffice o if anything remains to be done after the expiration of the year besides the mere payment of money, the statute will apply

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 It is not therefore correct to state that Santiago Babao has fully complied with his part within the year from the alleged contract in question. For the Statute of Frauds to apply, the contract must be fully made and completed in every respect except for the writing required by the statute, in order to be enforceable on the ground of part performance. The parol agreement relied on must be certain, definite, clear, unambiguous, and unequivocal in its terms, and be clearly established by the evidence. Also, the oral contract must be fair, reasonable and just in its provisions for equity to enforce it on the ground of part performance. The alleged agreement is far from complying with the above requirement o the agreement is vague and ambiguous for it does not specify how many hectares was to be planted to coconuts, how many to rice and corn, and what portion to bananas and bamboo trees. o On the part of Celestina Perez, her promise is also incapable of execution. How could she give and deliver one half of the land upon her death?" The agreement being vague and ambiguous, the doctrine of part performance cannot therefore be invoked to take this case out of the operation of the statute. o there can be no part performance until there is a definite and complete agreement between the parties o to warrant the specific enforcement of a parol contract for the sale of land, on the ground of part performance, all the essential terms of the contract must be established by competent proof, and shown to be definite, certain, clear, and unambiguous. o The parol contract must be sufficiently clear and definite to render the precise acts which are to be performed thereunder clearly ascertainable. o Its terms must be so clear and complete as to allow no reasonable doubt respecting its enforcement according to the understanding of the parties. o the existence of an oral agreement or understanding such as the 1 involved here, cannot be maintained on vague, uncertain, and indefinite testimony, against the reasonable presumption that prudent men who enter into such contracts will execute them in writing, and comply with the formalities prescribed by law. But where the evidence as to the existence of such an understanding or agreement is clear, convincing and satisfactory, the same broad principles of equity operate on this jurisdiction as in the United States to compel the parties to live up to the terms of their contract. TOPIC: WON the TC was correct in admitting the testimony of Bernardo Babao & his mother. counsel for appellants objected the admission of the testimony Bernardo Babao and that of his mother Cleofe Perez as to what occurred between Celestina and Santiago, with regard to the agreement on the ground that their testimony was prohibited by section 26(c) of Rule 123 of the Rules of Court. R123, s26(c): prohibits parties or assignors of parties to a case, or persons in whose behalf case is prosecuted, against an executor or administrator of a deceased person upon a claim or demand against the estate of such deceased person from testifying as to any matter of fact occurring before the death of such deceased person. TC: overruled the objection the rule did not apply where the complaint against the estate of a deceased person alleges fraud

In Ong Chua vs. Carr, cited by the TC, the witness was allowed to testify because the existence of fraud was first established by sufficient and competent evidence.

HERE - the alleged fraud is predicated upon the existence of the agreement itself which violates the rule of petitio principii. Evidently, the fraud to exist must be established by evidence aliunde and not by the same evidence which is to sought to be prevented o Reason: "if death has closed the lips of one party, the policy of the law is to close the lips of the other.' o Reason: `the temptation to falsehood and concealment in such cases is considered too great to allow the surviving party to testify in his own behalf.' o Accordingly, the incompetency applies whether the deceased died before or after the commencement of the action against him, if at the time the testimony was given he was dead and cannot disprove it, since the reason for the prohibition, which is to discourage perjury, exists in both instances. all the parol evidence of appellee was submitted in violation of the Statute of Frauds, or of the rule which prohibits testimony against deceased persons case dismissed BANCO FILIPINO v. MONETARY BOARD FACTS: The Monetary Board closed down Banco Filipino. BF petitioned for the production of documents and tapes supposedly necessary for the preparation of BFs case, but MB didnt want to give BF copies of these documents. Some of these documents were tapes of deliberations of the MB regarding the closure of BF, some letters, and the annexes of an SES Report, which the petitioner was furnished with. Among BFs allegations was that the Central Bank governor had some shady dealings and decisions, thats why they say the MB is trying to suppress the production of these documents. MB on the other hand invoked Secs. 13 and 15 of the Central Bank Act that holds liable members of the MB who discloses information of a confidential nature about the discussion or resolutions of the MB. They also invoked Rule 130, Sec. 24 (e): A public officer cannot be examined during his term of office or afterwards, as to communications made to him in official confidence, when the court finds that the public interest would suffer by disclosure. Also, MB claimed that the "public interest" requirement for non-disclosure is evident from the fact that the statutes punish any disclosure of such deliberations. ISSUE: Can the MB hide behind the privileged communication rule? NO. RATIO: The Court said that the documents are not privilege and that these constitute evidence material to the issues being inquired into by the Court. It has been held that "a party is ordinarily entitled to the production of books, documents and papers which are material and relevant to the establishment of his cause of

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action or defense" and "the test to be applied by the trial judge in determining the relevancy of documents and the sufficiency of their description is one of reasonableness and practicability." Regarding the annexes, petitioner cannot adequately study and properly analyze the SES report without the corresponding annexes. Pertinent and relevant, these could be useful and even necessary to the preparation by petitioner of its comment, objections and exceptions to the Conservator's reports and receiver's reports. The letter and reports could be favorable or adverse to the case of petitioner but whatever the result may be, petitioner should be allowed to photocopy the same. As to the tapes of deliberations, these may be confidential but not necessarily absolute and privileged. There is no specific provision in the Central Bank Act, even in Sections 13 and 15 thereof, which prohibits absolutely the courts from conducting an inquiry on said deliberations when these are relevant or material to a matter subject of a suit pending before it. The disclosure is here not intended to obtain information for personal gain. There is no indication that such disclosure would cause detriment to the government, to the bank or to third parties. Significantly, it is the bank itself here that is interested in obtaining what it considers as information useful and indispensably needed by it to support its position in the matter being inquired to by the court below. As to the application of Rule 130, Sec. 24(e): This privilege is intended not for the protection of public officers but for the protection of public interest. Where there is no public interest that would be prejudiced, this invoked rule will not be applicable. In the case at bar, the respondents have not established that public interest would suffer by the disclosure of the papers and documents sought by petitioner. Considering that petitioner bank was already closed as of January 25, 1985, any disclosure of the aforementioned letters, reports, and transcripts at this time pose no danger or peril to our economy. Neither will it trigger any bank run nor compromise state secrets. If the respondents public officials acted rightfully and prudently in the performance of their duties, there should be nothing at all that would provoke fear of disclosure On the contrary, public interests will be best served by the disclosure of the documents. Not only the banks and its employees but also its numerous depositors and creditors are entitled to be informed as to whether or not there was a valid and legal justification for the petitioner's bank closure. Public interest means more than a mere curiosity; it means something in which the public, the community at large, has some pecuniary interest by which their legal rights or liabilities are affected (State vs. Crocket). DISPOSITIVE PORTION: IN VIEW OF ALL THE FOREGOING, the order to produce documents dated February 17, 1986 issued by the court below in S.C.- G.R. No. 70054, is hereby affirmed, except as to the copies of the tapes relative to the Monetary Board deliberations on the closure of Banco Filipino on January 25, 1985 and its meetings on July 27, 1984, and March 22, 1985 and only if such tapes are actually no longer available taking into account respondent Monetary Board's manifestations that the tape recording of the deliberations of that Board are, for

purposes of economy, used over and over again inasmuch as these tapes are not required to be kept or stored. SO ORDERED.

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