EN BANC

[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.

Menandro Quiogue for petitioners.

Jose Ma. Recto and Paterno R. Canlas for respondent.

SYLLABUS

1. EVIDENCE; EXAMINATION OF WITNESSES; PROHIBITION IN SECTION

26(c), RULE 123, RULES OF COURT; WAIVER; REASON. — There was a waiver of the
prohibition contained in Section 26(c), Rules 123 of the Rules of Court, when the
counsel for the administratrix extensively cross-examined the witness on the very
matters subject of the prohibition. The reason for the rule apparently is that a litigant
cannot be permitted to speculate as to what his examination of a witness may bring
forth. Having made his selection of one of two courses which he may pursue, he has no
right, after he discovers that the course selected is not to his advantage, and after he
has put the opposite party to the expense, and has consumed the time of courts in a
trial of the case in accordance with the course selected, to change his position and
make another and different selection. Such course would be unfair both to the opposite
party and to the court and should not be countenanced in any court of justice (IV
Francisco, Rules of Court, 876, 877, citing the case of Comstock's Adm'r vs. Jacobs, 89
VT. 133, 94 A. 497, Ann. Cas. 1918A, 465).
2. LACHES; ELEMENTS THAT SHOULD BE PRESENT. — In order that the
defense of laches may prosper, the following elements must be present: (1) conduct on
the part of defendant, or one under whom he claims, giving rise to the situation
complained of, (2) delay in asserting complainant's right after knowledge or notice of
defendant's conduct and an opportunity to sue, (3) lack of knowledge or notice on the
part of the defendant that complaint would assert the right on which he bases suit, and
(4) injury or prejudice to defendant in the event relief is accorded. (Villoria vs. Secretary
of Agriculture and Natural Resources, 107 Phil., 879; 58 Off. Gaz., [28] 4963).
3. ID.; ID.; CHANGES OF CONDITION DETRIMENTAL TO DEFENDANT
NECESSARY IN LACHES. — The mere lapse of time during which there was neglect to
enforce the right is not the sole basis of the rule on laches, but also the changes of
conditions which may have arisen during the period there has been neglect. When there
are no changes of condition detrimental to the defendant, the defense of laches may
not prosper.
4. OBLIGATIONS AND CONTRACTS; DEBT MORATORIUM; EFFECT OF
REPUBLIC ACT No. 342. — Republic Act No. 342 did not lift the moratorium on debts
contracted during the war (Uy vs. Kalaw Katigbak, G.R. No. L-1830, Dec. 31, 1949) but
modi ed Executive Order No. 32 as to pre-war debts making the protection available
only to debtors who had war damage claims (Sison vs. Mirasol, G.R. No. L-4711, Oct.
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 31, 1952).

DECISION

DE LEON , J : p

This is a petition to review on certiorari the decision of the Court of Appeals in

CA-G. R. No. 21222-R.
The facts as shown by the record are as follows: On September 3, 1943, Juan C.
Ysmael, obtained a loan from Alfonso Abraham Sr. in the amount of P12,500.00 in
Japanese currency notes, and executed a promissory note in favor of the latter
promising to pay the loan within 90 days with interest at the rate of 10% per annum. The
note was executed in the presence of Florencia Q. Abraham, the creditor's wife, who
a xed her signature at the bottom thereof as a witness thereto. Upon the maturity of
the note, a demand was made for its payment, but the debtor failed to pay.
On February 9, 1945, Alfonso Abraham Sr. died. On the other hand, Juan C.
Ysmael died intestate on April 23, 1952 leaving the note still unpaid.
On November 13, 1954, in Special Proceedings No. Q-285 for the settlement of
the intestate estate of Juan Ysmael, pending before the Court of First Instance of
Quezon City, Florencia Q. Vda. de Abraham together with her sons, Alfonso and Jesus,
all surnamed Abraham, led a pleading entitled "Reclamacion" demanding payment of
the amount represented by the note. Because no regular administrator of the estate
had yet been appointed by the court, the "Reclamacion" was not acted upon. However,
as soon as Priscilla Recto-Kasten was appointed administratrix, the claimants
reproduced their "Reclamacion" before the lower court and the same was nally set for
hearing. As agreed upon by the parties, the reception of evidence was delegated to a
commissioner. During the hearing before the commissioner, the counsel for the
administratrix interposed a general and continuing objection to the testimony of
Florencia Vda. de Abraham invoking the provisions of Section 26 (c), Rule 123 of the
Rules of Court. However, after the claimant had testi ed, he lengthily cross-examined
her on the very matters against which he interposed a general objection.
On October 4, 1956, the lower court issued an Order-Decree allowing the claim
against the intestate estate of Juan C. Ysmael, the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING CONSIDERATION, the Court rules that the
claimants established a just and valid claim against the estate of Juan C.
Ysmael, and therefore the "reclamacion" under consideration is hereby
APPROVED.

"The administratrix is hereby ordered to pay the claimants herein the

amount of P5,000.00 with interest thereon at 10% per annum, in accordance with
the Ballantyne Scale of Value for the year December, 1943, out of the funds of the
estate in the course of her administration.

"SO ORDERED."

From the above Order-Decree, Priscilla Recto-Kasten, the administratrix,

appealed to the Court of Appeals. The appellate court concluding that "the lower court
erred in nding that the claimants have established a just and valid claim, and in
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 allowing the claim — supposing it was a claim with consideration — when the same had
been barred by prescription, estoppel and laches," reversed the Order-Decree appealed
from. Hence, this petition for review brought by the claimants.
The main issue in this petition is whether or not petitioners have established a
just and valid claim. And if the answer is in the a rmative, whether the same is already
barred by prescription and laches.
The record shows that petitioners have established the due execution and
genuineness of the promissory note and that respondents failed to present any
evidence to destroy the same. Thus, in the Order-Decree appealed from, the lower court
observed:
"It is interesting to note that the promissory note executed by the deceased
was produced before the Court and marked as Exhibit B-1, and the circumstances
under which the same was executed was extensively described by Florencia Q. de
Abraham during the hearing, who, strikingly is one of the witnesses to the said
instrument. Much to the surprise of the Court this description was more vividly
given by the said witness not in answer to the questions propounded by her
lawyer but on cross-examination of counsel for the administratrix, who feebly
attempted to destroy the due execution and genuineness of the said document. It
is indeed unfortunate that counsel for the administratrix did not choose to present
evidence to destroy the alleged genuineness of the promissory note (Exhibit B-1)
in support of his theory, despite insinuation during the course of the trial that he
might try to secure the services of an expert to determine the genuineness of the
signature of the late Juan C. Ysmael mentioned therein. (t.s.n., p. 83) Again
counsel manifested that if Exhibit B-1 is a genuine document the same has been
fully paid already, (t.s.n., p. 85), however, counsel did not present any proof to
support this contention."

It is true that Section 26 (c), Rule 123 of the Rules of Court provides:
"(c) Parties or assignors of parties to a case, or persons in whose
behalf a case is prosecuted, against an executor 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;"

However, there was a waiver of the prohibition when the counsel for the
administratrix extensively cross-examined the witness on the very matters subject of
the prohibition. (Wright vs. Tinio, G. R. No. L-4004, May 29, 1952; see also Tongco vs.
Vianzon, 50 Phil. 698; Macfarlane vs. Green, 54 Phil. 551). It was for this reason that the
trial judge eventually overruled the counsel's previous general and continuing objection
and admitted the testimony of the witness. Furthermore, it is di cult to believe that the
counsel's lengthy cross-examination on the prohibited matters was merely for the
purpose of establishing the "motive, prejudices and predilection" of the witness. In this
connection, it has been said:
". . . The reason for the rule apparently is that a litigant cannot be permitted
to speculate as to what his examination of a witness may bring forth.
Having made his selection of one of two courses which he may pursue, he
has no light, after he discovers that the course selected is not to his
advantage, and after he has put the opposite party to the expense, and has
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 consumed the time of the courts in a trial of the case in accordance with the
course selected, to change his position and make another and different
selection. Such course would be unfair both to the opposite party and to the
court and should not be countenanced in any court of justice. (IV Francisco,
RULES OF COURT, 876, 877, citing the case of Comstock's Adm'r vs. Jacobs,
89 VT. 133, 94 A. 497, Ann. Cas. 1913A, 465)".
The next issue is whether or not the claim is already barred by prescription and
laches. Under the New Civil Code, an action upon a written contract must be brought
within 10 years from the time the right of action accrues. (Art. 1144, par. 1). In the case
at bar, the cause of action accrued on December 3, 1943 (the date when the note
became due and demandable) and petitioners led their "reclamación" only on
November 13, 1954. Apparently, the action has already prescribed, because more than
ten years had elapsed before any suit was led. However, it must be remembered that
the provisions on moratorium had the effect of suspending the statute of limitations
from November 18, 1944 when Executive Order No. 25 was issued, to May 18, 1953,
the date of promulgation of the decision in the case of Rutter vs. Esteban (G.R. No. L-
3708) holding such provisions no longer applicable (Rio y Compañia vs. Sandoval, G.R.
No. L-9391, November 28, 1956; Compañia Maritima vs. Court of Appeals, G.R. No. L-
14949, May 30, 1960). Thus, from December 3, 1943 to November 13, 1954, eleven
years, eleven months and ten days have elapsed. Deducting from this period eight years
and six months, the time during which the statute of limitations was suspended, it is
clear that petitioners' claim has not yet prescribed when it was led on November 13,
1954.
Respondents, however, contend that Republic Act No. 342, which tools effect on
July 26, 1948, lifted the moratorium on debts contracted during the Japanese
occupation. The contention is untenable. This court has already held that Republic Act
No. 342 did not lift the moratorium on debts contracted during the war (Uy vs. Kalaw
Katigbak, G. R. No. L-1830, Dec. 31, 1949) but modi ed Executive Order No. 32 as to
prewar debts, making the protection available only to debtors who had war damage
claims (Sison vs. Mirasol, G. R. No. L-4711, Oct. 31, 1952).
In order that the defense of laches may prosper, the following elements must be
present: 1) conduct on the part of defendant, or one under whom he claims, giving rise
to the situation complained of, 2) delay in asserting complainant's right after
knowledge or notice of defendant's conduct and an opportunity to sue, 3) lack of
knowledge or notice on the part of the defendant that complainant would assert the
right on which he bases suit, and 4) injury or prejudice to defendant in the event relief is
accorded. (Villoria vs. Secretary of Agriculture and Natural Resources, G.R. No. L-11754,
April 29, 1960) Assuming that the rst three elements are present, we do not see how
the last element may exists, for neither injury or prejudice to respondent may occur by
the allowance of the claim. It should be emphasized here that mere lapse of time during
which there was neglect to enforce the right is not the sole basis of the rule on laches,
but also the changes of conditions which may have arisen during the period there has
been neglect. When there are no changes of condition detrimental to the defendant, the
defense of laches may not prosper.
IN VIEW OF THE FOREGOING, the decision of the Court of Appeals in CA-G. R. No.
21222-R is hereby reversed and the Order-Decree dated October 4, 1956 of the Court
of First Instance of Quezon City in Special Proceedings No. Q-285 is hereby a rmed in
all respects. Without costs.
Bengzon, C.J., Padilla, Labrador; Concepcion, Reyes, J.B.L., Barrera, Paredes and
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 Dizon, JJ., concur.
Bautista Angelo, J., took no part.

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