EVIDENCE FACTS:

[29] RAZON V IAC  Vicente Chuidian (respondent) is the administrator of the intestate estate of his
MARCH 16, 1992 | GUTIERREZ, J. father Juan T. Chuidian. He filed a complaint against petitioner Enrique Razon et
AKYAR | GROUP I al. praying that Razon et al. be ordered to deliver to him certificates of stock
representing the shareholdings of the late Juan Chuidian in the corporation E.
G.R. NO. 74306 Razon, Inc.
PETITIONER: Enrique Razon  In their answer, Razon alleged that all the shares of stock in the name of
RESPONDENTS: Intermediate Appellate Court and Vicente B. Chuidian, in his stockholders of record of the corporation were fully paid for by Razon. They
capacity as Administrator of the Estate of the Deceased Juan T. Chuidian further asserted that the shares are subject to the agreement between Razon and
TOPIC: Dead Man’s Statute the incorporators, and that the shares of stock were actually owned by and
remained in Razon’s possession. They also said that the deceased or Vicente did
G.R. NO. 74315 not pay any amount for the 1,500 shares of stock in question.
PETITIONER: Vicente B. Chuidian  It appears that Vicente is the administrator of the intestate estate of the deceased
RESPONDENTS: Intermediate Appellate Court, Enrique Razon, and E. Razon, Inc. in a special proceedings case. Razon organized the corporation for the purpose of
bidding for the arrestre services in Manila.
TOPIC: Dead Man’s Statute  A stock certificate representing 1,500 shares of stock of the corporation was issued
in the name of Juan. On this basis, Juan, and subsequently, Vicente were elected as
directors of the corporation. For five years, Razon did not question the ownership
CASE SUMMARY: by the deceased of the shares of stock in question.
 (Consolidated petitions) The ownership of 1,500 shares of stock of E. Razon Inc.  The certificate of stock was in the possession of Razon who refused to deliver the
under the name of Juan T. Chuidian (deceased) is being contested by Enrique shares to Vicente, until the same was surrendered by Razon and deposited in a
Razon and Vicente Chudian, son and the administrator of the estate of Juan safety box in Philippine Bank of Commerce.
Chuidian. Vicente filed the case to recover shares of his father. Razon avers that he  Razon et al. allege that after organizing the corporation, Razon distributed the
remained the owner of the stocks since Juan, as a nominal stockholder failed to shares of stock to some of his friends, including Juan as a nominal stockholder.
pay for its value. Razon testified regarding the oral agreement between him and According to them, the shares of stock were delivered by Juan to Razon because it
the deceased Juan T. Chuidian that the ownership of the shares of stock was was Razon who paid for all the subscription on the shares of stock, and the
actually vested in him unless the Juan opted to pay the same. CFI of Manila understanding was that Razon was the owner of the shares and was to have
declared Razon as the owner of the stocks. However, the IAC excluded the possession thereof until he is paid.
testimony of Razon and and ruled that ownership belongs to Juan T. Chuidian. In  The CFI of Manila declared that Enrique Razon is the owner of the shares of stock.
his petition before the SC, Razon avers that the IAC misapplied the dead man’s The IAC reversed the trial court’s decision and ruled that Juan T. Chuidian is the
statute. The SC held that the oral testimony of Razon should not be excluded owner of the shares of stock. Both parties filed separate motions for
because it is not within the prohibition of the rule since the case was not filed reconsideration.
against the administrator of the estate, nor was it filed upon claims against the  The petitioner maintains that his oral testimony as regards the true nature of his
estate. Moreover, granting that the testimony is prohibited, Vicente is deemed to agreement with the late Juan Chuidian on the 1,500 shares of stock of E. Razon,
have waived such rule for failure to object to the testimony which was even subject Inc. is sufficient to prove his ownership over the said 1,500 shares of stock.
to cross-examination by Vicente’s counsel. Despite its admissibility, Razon’s  Razon, in this petition argues that the appellate court misapplied the dead man’s
testimony was not enough to prove ownership. The SC ruled that the stocks belong statute (now Sec. 23, Rule 130). According to him, the dead man’s statute is not
to the estate of Juan T. Chuidian. applicable in this case because Vicente did not object to Razon’s oral testimony
regarding the oral agreement between Razon and Juan Chuidian that the
ownership of the shares of stock was actually belongs to Razon unless the deceased
DOCTRINE: opted to pay the same, and also that Razon was subjected to a rigid cross
 The “dead man’s statute” does not apply when the suit is not filed against the examination regarding such testimony.
administrator of the estate, nor was it filed upon claims against the estate.
ISSUES and RULING: Razon’s petition is DISMISSED. Vicente Chuidian’s petition Chuidian was the legal counsel who handled the legal affairs of the
that all cash and stock dividends including pre-emptive rights be declared to belong to corporation.
the state of Juan T. Chuidian is GRANTED.
 Whether Razon’s oral testimony should be excluded – NO DISPOSITIVE:
o Under Sec. 23, Rule 130, “parties or assignors of parties to a case, or persons  WHEREFORE, judgment is rendered as follows: (a) In G.R. No. 74306, the petition
in whose behalf a case is prosecuted, against an executor or administrator or is DISMISSED. The questioned decision and resolution of the then Intermediate
other representative of a deceased person, or against a person of unsound Appellate Court, now the Court of Appeals, are AFFIRMED. Costs against the
mind, upon a claim or demand against the estate of such deceased person or petitioner. (b) In G.R. No. 74315, the petition is GRANTED. The questioned
against such person of unsound mind, cannot testify as to any matter of fact Resolution insofar as it denied the petitioner’s motion to clarify the dispositive
accruing before the death of such deceased person or before such person portion of the decision of the then Intermediate Appellate Court, now Court of
became of unsound mind.” Appeals is REVERSED and SET ASIDE. The decision of the appellate court is
o The reason for the rule is that if persons having a claim against the estate of MODIFIED in that all cash and stock dividends as well as all pre-emptive rights
the deceased or his properties were allowed to testify as to the supposed that have accrued and attached to the 1,500 shares in E. Razon, Inc., since 1966 are
statements made by him (deceased person), many would be tempted to falsely declared to belong to the estate of Juan T. Chuidian. SO ORDERED.
impute statements to deceased persons as the latter can no longer deny or
refute them, thus unjustly subjecting their properties or rights to false or
unscrupulous claims or demands. The purpose of the law is to ‘guard against
the temptation to give false testimony in regard to the transaction in question
on the part of the surviving party.
o The rule, however, delimits the prohibition it contemplates in that it is
applicable to a case against the administrator or its representative of an estate
upon a claim against the estate of the deceased person.
o The testimony excluded by the appellate court is that of Razon to the effect
that Juan and Razon agreed in the lifetime of Juan Chuidian that the 1,500
shares of stock in the corporation are actually owned by Razon unless Juan
opted to pay the same which never happened. The case was filed by the
administrator of the estate of Juan Chuidian to recover shares of stock in the
corporation allegedly owned by him.
o It is clear, therefore, that the testimony of the Razon is not within the
prohibition of the rule. The case was not filed against the administrator of the
estate, nor was it filed upon claims against the estate.
o The records show that Vicente never objected to the testimony of Razon as
regards the true nature of his transaction with the deceased. Razon’s
testimony was subjected to cross-examination by Vicente’s counsel. Hence,
granting that Razon’s testimony is within the prohibition of Sec. 23, Rule 130,
Vicente is deemed to have waived the rule. The court cannot disregard
evidence which would ordinarily be incompetent but has been rendered
admissible by the failure of a party to object thereto.
On the ownership of shares
o However, Razon’s testimony is not enough to prove his ownership over the
shares of stock in question. Razon was not able to prove compliance with the
formalities which require the indorsement of the stock certificate. Moreover,
the preponderance of evidence supports the appellate court’s factual findings
that the shares of stock were given to Juan T. Chuidian for value. Juan T.