Facts:

Richard T. Fitzsimmons was the president and one of the largest stockholders of Atlantic, Gulf and Pacific Company of Manila. Under his agreements with the company should he die without having fully paid for the said 545 shares of stock, the company, at its option, may either reacquire the said 545 shares of stock by returning to his estate the amount applied thereon, or issue in favor of his estate the corresponding number of the company’s shares of stock equivalent to the amount paid thereon at P450 a share.

Soon after the Japanese army occupied Manila in January, 1942, it seized and took possession of the office and all the properties and assets of the appellant corporation and interned all its officials, they being American citizens.

Richard T. Fitzsimmons died on June 27, 1944, special proceeding was subsequently instituted in the CFI of Manila for the settlement of his estate.

The Atlantic, Gulf and Pacific Company of Manila resumed business operation in March, 1945.

The company claimed the 545 shares sold to the deceased Fitzsimmons upon return to his estate of the amount of P64,500 paid thereon, and asked the court to authorize the setoff of the amount of its claim of P63,868.67 from the amount of P64,500 returnable to the estate.

the administrator denied the alleged indebtedness of the deceased to the claimant, expressed his conformity to the refund of P64,500 by the claimant to the estate and the retransfer by the latter to the former of the 545 shares of stock, and set up a counterclaim of P90,000 for salaries allegedly due the deceased from the claimant corresponding to the years 1942, 1943, and the first half of 1944, at P36,000 per annum.

Issue: whether or not the officers of a corporation which is a party to an action against an executor or administrator of a deceased person are disqualified from testifying as to any matter of fact occurring before the death of such deceased person, under Rule 123, section 26(c), of the Rules of Court,

Ruling: The weight of authority sustains appellant’s first assignment of error. Inasmuch as section 26(c) of Rule 123 disqualifies only parties or assignors of parties, we are constrained to hold that the officers and/or stockholders of a corporation are not disqualified from testifying, for or against the corporation which is a party to an action upon a claim or demand against the estate of a deceased person, as to any matter of fact occurring before the death of such deceased person.

It results that the trial court erred in not admitting the testimony of Messrs. Belden and Garmezy. It is not necessary, however, to remand the case for the purpose of taking the testimony of said witnesses because it would be merely corroborative, if at all, and in any event what said witnesses would have testified, if permitted, already appears in the record as hereinabove set forth, and we can consider it together with the testimony of the chief accountant and the assistant accountant who, according to the appellant itself, were “the only ones in the best of position to testify on the status of the personal account” of the deceased Fitzsimmons.

We have no reason whatsoever to doubt the good faith of Messrs. Samuel Garmezy and Henry J. Belden, president and vice-president-treasurer, respectively, of the claimant corporation, in presenting the claim of P63,000 against the estate of Fitzsimmons, nor the good faith of the administrator Mr. Marcial P. Lichauco in opposing said claim. They are all men of recognized integrity and of good standing in society. The officers of the claimant corporation have shown commendable fairness in their dealings with the estate of Fitzsimmons. They voluntarily informed the administrator that Fitzsimmons had paid P64,500 on account of the purchase price of 545 shares of stock of the company, and not P45,000 only, as the administrator believed. Likewise, they voluntarily informed him in connection with his claim for Fitzsimmons’ back salaries that Fitzsimmons’ annual salary was P36,000 and not P30,000, as the administrator believed. We can therefore readily assume that Messrs. Garmezy and Belden believed in good faith that the books of the corporation showed a debit balance of around P63,000 as of the outbreak of the Pacific war on December 8, 1941.

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