Marella vs. Reyes

A statutory disqualification of a witness in a civil action — such as the prohibition against testifying on transactions with a decedent — is a personal privilege of the adverse litigant that is waived by a failure to object; once admitted, the testimony stands in the record and may not be disregarded sua sponte by the trial court. Furthermore, an oral contract for the sale of immovable property, accompanied by delivery of the title documents, is valid and effective between the contracting parties, notwithstanding the absence of a public instrument.

Filomeno Encarnacion died in 1901. In the administration of his intestate estate, the administrator included four parcels of land in the inventory. Gliceria Marella claimed that the land belonged to her, not to the estate, and sought its exclusion. Her claim rested on an oral agreement made in 1899 with Encarnacion and his wife, Andrea Goco, whereby the land was conveyed to her in satisfaction of an antecedent debt and the couple’s possessory information was simultaneously delivered. The administrator did not resist the claim, but Jose T. Paterno, a creditor whose claim of over ₱51,000 had been allowed by the commissioners, opposed the exclusion and obtained leave to intervene as a defendant.

• The Claim: Gliceria Marella alleged that she had lent money to Filomeno Encarnacion on several occasions. In 1898, Encarnacion and his wife Andrea Goco stated accounts with her, resulting in a balance in her favor, which they promised to pay and to secure by delivering their title papers — a possessory information covering the land. In 1899, the couple came to her house and, stating that they lacked funds to pay, proposed that Marella take the land itself, while they be allowed to continue cultivating it on the condition that, after deducting working expenses, one-half of the crop would go to her. The agreement was oral; it was not reduced to writing due to the confusion of the revolution and the war with the United States. Marella further claimed that on later demanding her share of the crop, Andrea Goco told her there had been no harvest because the loss of their work animals had made farming impossible.

• Corroborating Testimony: Marella’s brother, Juan Goco, and Aguedo Cebrera corroborated her account. Emiliano Encarnacion, a creditor who had demanded the title papers from the widow for use in court, testified that Andrea Goco replied she did not have them because she had delivered them to Marella as a guaranty of the debt she and her husband owed, and that she made no claim to the land. Marella’s own testimony included that she presented the possessory information before the administrator and the commissioners, showing a balance of ₱1,814 in her favor.

• Intervention: Jose T. Paterno, a creditor with an allowed claim of ₱51,595.02, moved first to be substituted as defendant in place of the administrator (who did not oppose the relief) and then to intervene as co-defendant. The substitution was denied but intervention was allowed.

• The Trial Court’s Treatment of Evidence: During trial, Marella testified as a witness, was sworn, examined, and cross-examined without any objection as to her competency. In his decision, the trial judge declared that her testimony could not be considered under subdivision 7 of section 383, Act No. 190, reasoning that the acts she swore to occurred before the decedent’s death, that the widow’s presence alone did not render Marella competent, and that the money was lent to the deceased, not to the wife. On this basis, and evidently unpersuaded by the remaining evidence, the court ruled against exclusion.

• Intervention Procedure: Marella contended that the intervention by mere motion, without a formal cross-complaint, was improper under section 121 of the Code of Civil Procedure, which upon a literal reading required a pleading.

• Competency and Consideration of Testimony: The trial court’s sua sponte rejection of her sworn testimony under the dead man’s statute was error because no objection had been interposed; the disqualification was waived.

• Validity of the Oral Transfer: The oral agreement of 1899, accompanied by delivery of the possessory information, constituted a valid sale and tradition sufficient to transfer ownership under the Civil Code, entitling her to exclusion of the land from the inventory.

• Intervention Procedure: Paterno maintained that intervention by motion should be sustained as conforming to the nature of the remedy, consistent with earlier jurisprudence, and that his subsequent, unsuccessful motion for substitution did not vitiate the order allowing intervention.

• Witness Incompetence: The testimony of the plaintiff regarding transactions before the decedent’s death was barred by section 383(7) of Act No. 190, and the trial court correctly excluded it from consideration irrespective of the absence of a contemporaneous objection.

• Enforceability of Oral Contract: The alleged oral sale of immovable property, without a written instrument, was ineffective; therefore the lands properly remained part of the estate.

• Intervention Procedure: Whether the intervention of a creditor by motion, without filing a cross-complaint, was proper under the Code of Civil Procedure.

• Waiver of Disqualification: Whether the trial court may disregard the testimony of a plaintiff on the ground of incompetency under the dead man’s statute when no objection was raised by the adverse party.

• Validity of Oral Sale: Whether an oral agreement to convey land in satisfaction of a debt, accompanied by delivery of the title documents, constituted a valid transfer such that the property should be excluded from the decedent’s estate.

• Intervention Procedure: The intervention by motion, without a cross-complaint, was proper. The Court, relying on the recent decision in Behn, Meyer and Co. vs. Banco Español-Filipino, sustained a similar procedure and adopted an interpretation that accommodated the nature of the remedy rather than strictly adhering to the literal wording of section 121. The intervenor’s subsequent motion for substitution, though denied, did not deprive him of the benefit of the order allowing intervention.

• Waiver of Disqualification: The disqualification under section 383(7) of the Code of Civil Procedure is a personal privilege of litigants, not a jurisdictional bar. Because Paterno, the opposing party, did not object to Marella’s testimony when she was presented, sworn, and cross-examined, the incompetency was waived. Once admitted, testimony is in the case for whatever weight it may carry; the trial judge lacked the power to disregard it sua sponte solely because it could have been excluded upon timely objection.

• Validity of Oral Sale: The oral contract between the deceased and his wife on one part and Marella on the other was valid. Under Article 1464 of the Civil Code, delivery of the title deeds (the possessory information) is equivalent to delivery of the property. Citing Soriano vs. Cortes (8 Phil. 459) and Guerrero vs. Miguel (10 Phil. 52), the Court held that an oral sale of land accompanied by delivery of the title documents is valid and enforceable between the parties, even though not in a public instrument, as contemplated in Article 1280. Consequently, the land should have been excluded from the inventory.

• Waiver of statutory witness disqualification in civil cases — Under a rule such as section 383(7) of Act No. 190 (the “dead man’s statute”), the disqualification is a personal convenience of the litigant and is entirely within the litigant’s control. Failure to object to the competency of a witness when offered operates as a waiver; the court may not thereafter, on its own motion, strike the testimony from the record or refuse to consider it on the ground of incompetency. The testimony remains in the case for whatever evidentiary value it may possess.

• Oral sale of immovable property with delivery of title deeds — Under Articles 1280 and 1464 of the Civil Code, an oral contract of sale of real property is valid between the contracting parties. Delivery of the title documents (such as a possessory information) constitutes tradition or constructive delivery, transferring ownership. The absence of a public instrument does not render the sale void but merely affects its registration or enforceability against third parties.

• "The disqualification of witnesses found in rules of evidence of this character, is one [of] convenience of litigants, and which consequently lies within their control." — Articulates the nature of the waiver rule.

• "Once admitted, the testimony is in the case for what it is worth and the judge has no power to disregard it for the sole reason that it could have been excluded, if it had been objected to, nor to strike it out on his own motion." — Central holding on judicial treatment of unobjected-to incompetent testimony.

• "We hold that the contract made between the deceased and his wife, on one part, and the plaintiff on the other, although not in writing, was valid, and that the delivery of the title deeds of the property itself." — Encapsulates the substantive ruling on the oral sale.

• (Regarding intervention) "accepting, in the case of a defendant who unites in accordance with the nature of the remedy, rather than with the literal wording of the section." — Summarizes the flexible approach to intervention under the old Code of Civil Procedure.

• Behn, Meyer and Co. vs. Banco Español-Filipino, decided September 9, 1908 — Sustained a similar procedure of intervention by motion; followed to uphold the propriety of Paterno’s intervention.

• Soriano vs. Cortes, 8 Phil. Rep. 459 — Authority for the rule that an oral sale accompanied by delivery of the title deeds is valid between the parties.

• Guerrero vs. Miguel, 10 Phil. Rep. 52 — Similarly applied to support the validity of an oral conveyance of land with delivery of title documents.

• Section 121, Code of Civil Procedure — Prescribed intervention by cross-complaint; interpreted liberally to permit intervention by motion in accordance with the nature of the remedy.

• Section 383(7), Act No. 190 (Code of Civil Procedure) — Disqualified a party from testifying on matters of fact occurring before the death of a deceased person in a claim against the estate; held to be waivable, the disqualification being a personal privilege of the litigant.

• Articles 1280 and 1464, Civil Code — Article 1464 provided that the delivery of the title deeds is equivalent to the delivery of the thing sold; Article 1280 required a public instrument for contracts creating or transmitting real rights over immovable property, but was interpreted as not invalidating an oral contract between the parties, especially where tradition had been effected.

Arellano, C.J., Torres, Mapa, Carson, and Willard, JJ., concurred.