A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.[6]Hence, based on the intention of the parties, as gathered from the facts and ascertained from their language and conduct, a verbal contract of partnership may arise.[7] The essential points that must be proven to show that a partnership was agreed upon are (1) mutual contribution to a common stock, and (2) a joint interest in the profits.[8]Understandably so, in view of the absence of a written contract of partnership between respondent and Jacinto, respondent resorted to the introduction of documentary and testimonial evidence to prove said partnership. The crucial issue to settle then is whether or not the “Dead Man’s Statute” applies to this case so as to render inadmissible respondent’s testimony and that of his witness, Josephine.
The “Dead Man’s Statute” provides that if one party to the alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the surviving party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction.[9] But before this rule can be successfully invoked to bar the introduction of testimonial evidence, it is necessary that:
Two reasons forestall the application of the “Dead Man’s Statute” to this case.
First, petitioners filed a compulsory counterclaim[11] against respondent in their answer before the trial court, and with the filing of their counterclaim, petitioners themselves effectively removed this case from the ambit of the “Dead Man’s Statute”.[12] Well entrenched is the rule that when it is the executor or administrator or representatives of the estate that sets up the counterclaim, the plaintiff, herein respondent, may testify to occurrences before the death of the deceased to defeat the counterclaim.[13] Moreover, as defendant in the counterclaim, respondent is not disqualified from testifying as to matters of fact occurring before the death of the deceased, said action not having been brought against but by the estate or representatives of the deceased.[14]
Second, the testimony of Josephine is not covered by the “Dead Man’s Statute” for the simple reason that she is not “a party or assignor of a party to a case or persons in whose behalf a case is prosecuted”. Records show that respondent offered the testimony of Josephine to establish the existence of the partnership between respondent and Jacinto. Petitioners’ insistence that Josephine is the alter ego of respondent does not make her an assignor because the term “assignor” of a party means “assignor of a cause of action which has arisen, and not the assignor of a right assigned before any cause of action has arisen.”[15] Plainly then, Josephine is merely a witness of respondent, the latter being the party plaintiff.
We are not convinced by petitioners’ allegation that Josephine’s testimony lacks probative value because she was allegedly coerced by respondent, her brother-in-law, to testify in his favor. Josephine merely declared in court that she was requested by respondent to testify and that if she were not requested to do so she would not have testified. We fail to see how we can conclude from this candid admission that Josephine’s testimony is involuntary when she did not in any way categorically say that she was forced to be a witness of respondent. Also, the fact that Josephine is the sister of the wife of respondent does not diminish the value of her testimony since relationship per se, without more, does not affect the credibility of witnesses.[16]
Petitioners’ reliance alone on the “Dead Man’s Statute” to defeat respondent’s claim cannot prevail over the factual findings of the trial court and the Court of Appeals that a partnership was established between respondent and Jacinto. Based not only on the testimonial evidence, but the documentary evidence as well, the trial court and the Court of Appeals considered the evidence for respondent as sufficient to prove the formation of a partnership, albeit an informal one.
The “Dead Man’s Statute” provides that if one party to the alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the surviving party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction.[9] But before this rule can be successfully invoked to bar the introduction of testimonial evidence, it is necessary that:
Two reasons forestall the application of the “Dead Man’s Statute” to this case.
First, petitioners filed a compulsory counterclaim[11] against respondent in their answer before the trial court, and with the filing of their counterclaim, petitioners themselves effectively removed this case from the ambit of the “Dead Man’s Statute”.[12] Well entrenched is the rule that when it is the executor or administrator or representatives of the estate that sets up the counterclaim, the plaintiff, herein respondent, may testify to occurrences before the death of the deceased to defeat the counterclaim.[13] Moreover, as defendant in the counterclaim, respondent is not disqualified from testifying as to matters of fact occurring before the death of the deceased, said action not having been brought against but by the estate or representatives of the deceased.[14]
Second, the testimony of Josephine is not covered by the “Dead Man’s Statute” for the simple reason that she is not “a party or assignor of a party to a case or persons in whose behalf a case is prosecuted”. Records show that respondent offered the testimony of Josephine to establish the existence of the partnership between respondent and Jacinto. Petitioners’ insistence that Josephine is the alter ego of respondent does not make her an assignor because the term “assignor” of a party means “assignor of a cause of action which has arisen, and not the assignor of a right assigned before any cause of action has arisen.”[15] Plainly then, Josephine is merely a witness of respondent, the latter being the party plaintiff.
We are not convinced by petitioners’ allegation that Josephine’s testimony lacks probative value because she was allegedly coerced by respondent, her brother-in-law, to testify in his favor. Josephine merely declared in court that she was requested by respondent to testify and that if she were not requested to do so she would not have testified. We fail to see how we can conclude from this candid admission that Josephine’s testimony is involuntary when she did not in any way categorically say that she was forced to be a witness of respondent. Also, the fact that Josephine is the sister of the wife of respondent does not diminish the value of her testimony since relationship per se, without more, does not affect the credibility of witnesses.[16]
Petitioners’ reliance alone on the “Dead Man’s Statute” to defeat respondent’s claim cannot prevail over the factual findings of the trial court and the Court of Appeals that a partnership was established between respondent and Jacinto. Based not only on the testimonial evidence, but the documentary evidence as well, the trial court and the Court of Appeals considered the evidence for respondent as sufficient to prove the formation of a partnership, albeit an informal one.
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