G.R. No. L-16741; January 31, 1962
FLORENCIA Q. DE ABRAHAM, ALFONSO ABRAHAM, and JESUS ABRAHAM, petitioners, vs. INTESTATE ESTATE OF JUAN C. YSMAEL, PRISCILLA RECTO-KASTEN, respondent.

FACTS

On September 3, 1943, Juan C. Ysmael obtained a loan from Alfonso Abraham, Sr., executing a promissory note for P12,500 in Japanese military notes, payable in 90 days with 10% annual interest. The note was witnessed by the creditor’s wife, Florencia Q. de Abraham. The debt remained unpaid upon maturity and after the deaths of both the creditor, Alfonso Abraham, Sr., in 1945, and the debtor, Juan C. Ysmael, in 1952. In 1954, the heirs of Abraham filed a “Reclamation” for payment against Ysmael’s intestate estate in the Court of First Instance of Quezon City.
During the hearing, the administratrix’s counsel objected to Florencia’s testimony under the “dead man’s statute” (Section 26(c), Rule 123), which disqualifies interested parties from testifying on matters occurring before the decedent’s death. However, counsel proceeded to extensively cross-examine Florencia on the very facts surrounding the execution of the promissory note. The trial court overruled the objection, admitted her testimony, and subsequently allowed the claim, ordering payment of P5,000 adjusted per the Ballantyne Scale. The Court of Appeals reversed, holding the claim was not validly established and was barred by prescription and laches.

ISSUE

The main issues are: (1) whether petitioners validly established their claim against the estate, and (2) if so, whether the claim is barred by prescription or laches.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the trial court’s order. On the first issue, the claim was validly established. The administratrix’s counsel waived the protection of the “dead man’s statute” by conducting a lengthy cross-examination of Florencia on the prohibited subject matter. The Court, citing precedent, held that a party cannot invoke the disqualification and then proceed to examine the witness on the same facts; such conduct constitutes a waiver. The promissory note’s due execution and genuineness were thus established, as the estate presented no contrary evidence.
On the second issue, the claim was not barred. Prescription did not run because the moratorium laws (Executive Orders) suspended the statute of limitations from November 18, 1944, to May 18, 1953—a period of eight years and six months. The claim, filed on November 13, 1954, was within the ten-year prescriptive period for written contracts when the suspension is deducted. Republic Act No. 342 did not lift the moratorium for wartime debts. Laches also did not apply, as its essential element of injury or prejudice to the respondent estate was absent. Mere delay, without detrimental changes in condition, is insufficient to sustain laches. Therefore, the claim was valid and enforceable.