THE PHILIPPINE NATIONAL BANK, PLAINTIFF AND APPELLANT, VS. UY TENG PIAO, DEFENDANT AND APPELLEE.

This is an appeal by the plaintiff from a decision of the Court of First
Instance of Manila absolving the defendant from the complaint, without a special
finding as to costs. The appellant makes the following assignments of error:

“The trial court erred:

“1. In finding that one Mr. Pecson gave a promise to appellee Uy Teng Piao to
condone the balance of the judgment rendered against the said Uy Teng Piao and
in favor of the Philippine National Bank in civil case No. 26328 of the Court of
First Instance of Manila.

“2. In finding that merely in selling the property described in certificate
of title No. 11274 situated at Ronquillo Street, Manila, to Mariano Santos for
P8,600 (Exhibit 2), the appellant had undoubtedly given the alleged promise of
condonation to appellee Uy Teng Piao.

“3. In finding that the consideration of document Exhibit 1 is the
condonation of the balance of the judgment rendered in said civil case No.
26328.

“4. In finding that said Mr. Pecson, granting that the latter has’ actually
given such promise to condone, could bind the appellant corporation.

“5. In holding that the absence of demand for payment upon appellee Uy Teng
Piao for the balance of the said judgment from February 11, 1925 up to the year
1930 is ‘una senal inequivoca y una prueba evidente’ of the condonation of the
balance of the said judgment.

“6. In finding that by the sale of the said property to Mariano Santos for
the sum of P8,600, the said judgment in civil case No. 26328 has been more than
fully paid even discounting the sum of P1,300 which appellant paid as the
highest bidder for the said property.

“7. In declaring that the offer of appellee Uy Teng Piao as shown by Exhibits
B and D-l, reflects only the desire of the said appellee Uy Teng Piao to avoid
having a case with the appellant bank.

“8. In finally absolving appellee Uy Teng Piao and in not sentencing him to
pay the amount claimed in the complaint with costs.”

On September 9, 1924 the Court of First Instance of Manila rendered a
judgment in favor of the Philippine National Bank and against Uy Teng Piao in
civil case No. 26328 for the sum of P17,232.42 with interest at 7 per cent per
annum from June 1, 1924, plus 10 per cent of the sum amount for attorney’s fees
and costs. The court ordered the defendant to deposit said amount with the clerk
of the court within three months from the date of the judgment, and in case of
his failure to do so that the mortgaged properties described in transfer
certificates of title Nos. 7264 and 8274 should be sold at public auction in
accordance with the law and the proceeds applied to the payment of the judgment.

Uy Teng Piao failed to comply with the order of the court, and the sheriff of
the City of Manila sold the two parcels of land at public auction to the
Philippine National Bank on October 14, 1924 for P300 and P1,000 respectively.

On February 11, 1925, the Philippine National Bank secured from Uy Teng Piao
a waiver of his right to redeem the property described in Transfer Certificate
of Tittle No. 8274, and on the same date the bank sold said property to Mariano
Santos for P8,600.

Evidently the other parcel, Transfer Certificate of Title No. 7264, was
subsequently resold by the bank for P2,700, because the account of the defendant
was credited with the sum of P11,300. In other words, the bank credited the
defendant with the full amount realized by it when it resold the two parcels of
land.

The bank brought the present action to revive the judgment for the balance of
P11,574.38, with interest at 7 per cent per annum from August 1, 1930.

In his amended answer the defendant alleged as a special defense that he
waived his right to redeem the land described in transfer certificate of title
No. 8274 in consideration of an understanding between him and the bank that the
bank would not collect from him the balance of the judgment; It was on this
ground that the trial court absolved the defendant from the complaint.

In our opinion the defendant has failed to prove any valid agreement on the
part of the bank not to collect from him the remainder of the judgment. The
alleged agreement rests upon the uncorroborated testimony of the defendant” the
pertinent part of whose testimony on direct examination was as follows:

“P. En este documento aparece que usted, por consideracion de valor recibido
del Banco Nacional demandante en la presente causa, renuncia a su dereeho de
recompra de la propiedad vendida por el Sheriff en publica subasta el catorce de
octubre de mil novecientos veinticuatro a favor del Banco Nacional; quiere usted
explicar al Honorable Juzgado, cual es esta consideracion de valor ?-R. Si,
senor. Esto desde mil novecientos veintitres o mil novecientos veinticuatro, no
recuerdo bien, me habia dicho el senor Pecson, porque algunas veces yo no podia
pagar esos intereses mensuales. Entonces me dijo Pecson, ‘como puede usted
recibir alquileres y no paga usted intereses?’

“P. iQuien es ese senor Pecson?-R. Era encargado de este asunto.

“P. Que era el del Banco Nacional, usted sabe?-R. Era encargado de estas
transacciones. Cuando tenia necesidad siempre Hamaba yo al senor Pecson.
Entonces hable al senor Pecson que somos comerciantes, algunas veces ]os
alquileres no pueden cobrarse por anticipado.

“Sr. ENDRIGA. No es resporisiva la contestation a la pregunta.

“Sr. GONZALEZ. Si esta explicando y no. ha terminado el testigo su
contestacion.

“JUZGADO. Que la termine.

“TESTIGO. Me dijo el senor Pecson que es cosa mala para mi por que usted
cobra alquileres y no paga los intereses? Mejor deje usted ya todos sus bienes
para cubrir sus deudas.’

“P. El senor Pecson le. dijo a usted ‘mejor deje usted ya todos sus bienes,’
a que bienes se referia el?-R. Al terreno de Ronquillo y al terreno de Paco.

“P. Cual de esos terrenos, el de Ronquillo o el de Paco, el que se refiere
aqui en el Exhibit 1?-R. Paco, primeramente, los dos ambos.

“P. Pero este Exhibit 1, a que se refiere; al de Paco o al de Ronquillo?-R.
Parece que Paco.

“P. No recuerda usted muy bien?-R. No recuerdo.

“P. Y cuando le dijo a usted el senor Pecson mejor que dejara todos sus
bienes, lie dijo a usted a favor de quien iba usted a dejar sus bienes?-R. Al
Banco Nacional.

“P. Y que le dijo a usted, si le dijo a usted algo el senor Pecson con
respecto al saldo deudor que usted todavia era en deber a favor del Banco
Nacional ?-R. No recuerdo mas; pero mas o menos de catorce mil pesos.

“P. Que le dijo el con respecto al saldo, si el cobraria todavia o se le
condonaria?

“Sr. ENDRIGA. Es alternativa la pregunta. Me opongo.

“JUZGADO. Cambiese la pregunta.

“P. Que le dijo a usted con respecto al saldo, una vez otorgado este Exhibit
1 ?

“Sr. ENDRIGA. La pregunta no tiene ninguna base. Nos oponemos.

“Sr. GONZALEZ. Si dice el que se habian vendido todos los terrenos. “Juzgado.
Puede contestar.

“Sr. ENDRIGA. Excepci6n.

“R. Me dijo que para que usted no cobre alquileres y no pague intereses deje
usted esos terrenos de Ronquillo y terreno de Paco para cubrir ya todas mis
deudas. Entonces dije ya, si, como yo tengo buena fe con este Banco. Hasta que
al fin yo dije que queria yo comprar.

“P. Cuando usted firmo el once de febrero de mil novecientos veinticinco este
documento Exhibit 1, recibio usted algun centimo de dinero del Banco?-R. Nada,
absolutamente.”

When asked on cross-examination if Pecson was not in Iloilo at the time of
the execution of defendant’s waiver of his right to redeem, the defendant
answered that he did not know; asked when Pecson had spoken to him about the
matter, the defendant replied that he did not remember.

One of the attorneys for the plaintiff testified that the defendant renounced
his right to redeem the parcel of land in Calle Ronquillo, Exhibit 1, because a
friend of the defendant was interested in buying it.

The bank ought to have presented Pecson as a witness, or his deposition, if
he was not residing in Manila at the time of the trial.

With respect to the testimony of the. bank’s attorney, we should like to
observe that although the law does not forbid an attorney to be a witness and at
the same time an attorney in a cause, the courts prefer that counsel should not
testify as a witness unless it is necessary, and that they should withdraw from
the active management of the case. (Malcolm, Legal Ethics, p. 148.) Canon 19 of
the Code of Legal Ethics reads as follows:

“When a lawyer is a witness for his client, except as to merely formal
matters, such as the attestation or custody of an instrument and the like, he
should leave the trial of the case to other counsel. Except when essential to
the ends of justice, a lawyer should avoid testifying in court in behalf of his
client.”

Defendant’s testimony as to the alleged agreement is very uncertain. There is
no mention in Exhibit 1 as to such an agreement on the part of the bank. Exhibit
1 relates only to the land in Calle Ronquillo. If Pecson had made any such
agreement as the defendant claims, it is reasonable to suppose that he would
have required the defendant to waive his right to redeem both parcels of land,
and that the defendant, a Chinese business man, would have insisted upon some
evidence of the agreement in writing. It appears to us that the defendant waived
his right to redeem the land in Calle Ronquillo, because a friend of his wished
to purchase it and was willing to pay therefor P8,600, and the bank agreed to
credit the defendant with,the full amount of the sale.

Furthermore, if it be conceded that there was such an Understanding between
Pecson and the defendant as the latter claims, it is not shown that Pecson was
authorized to make any such agreement for the bank. Only the board of directors
or the persons empowered by the board of directors could bind the bank by such
an agreement. There is no merit in the contention that since the bank accepted
the benefit of the waiver it cannot now repudiate the alleged agreement. The
fact that the bank after having bought the land for P1,000 resold it at the
instance of the defendant for P8,600 and credited the defendant with the full
amount of the resale was a sufficient consideration for the execution of
defendant’s waiver of his right to redeem.

For, the foregoing reasons, the decision appealed from is reversed, and the
defendant is condemned to pay the plaintiff the sum of P11,574.38 with interest
thereon at the rate of 7 per cent per annum from August 1,1930, and the costs of
both instances.

Malcolm, Villamor, Ostrand, Villa-Real, Abad Santos, Hull, Imperial,
and Butte, JJ., concur.