Sunga-Chan vs. Chua (G.R. No.

143340, August, 2001)

Facts:

The case involves a dispute over the existence of a partnership between Lamberto T. Chua and
the deceased Jacinto L. Sunga. Chua filed a case against Lilibeth Sunga Chan and Cecilia Sunga, daughter
and wife of Jacinto Sunga, for "Winding Up of Partnership Affairs, Accounting, Appraisal and Recovery of
Shares and Damages with Writ of Preliminary Attachment" with the Regional Trial Court of Sindangan,
Zamboanga del Norte. Chua claimed that he verbally entered into a partnership with Jacinto, with
Jacinto as the manager and Josephine Sy, a sister of Chua's wife, as his assistant. After Jacinto's death,
Lilibeth and Cecilia took over the business without Chua's consent and failed to comply with his
demands for accounting and restitution of his shares in the partnership. The trial court denied the
defendants' motion to dismiss and ruled in favor of Chua. The Court of Appeals affirmed the decision,
and the Supreme Court denied the defendants' petition for review.

Issue:

Whether the "Dead Man's Statute" or "Survivorship Rule" applies, which would render Chua's
testimony and that of his witness, Josephine, inadmissible to prove the existence of the partnership with
the deceased Jacinto.

Ruling:

The "Dead Man's Statute" does not apply in this case. The defendants' filing of a compulsory
counterclaim effectively removed the case from the scope of the statute. Josephine's testimony was not
covered by the statute since she was not a party or assignor of a party to the case. The factual findings of
the trial court and the Court of Appeals, which established the existence of a partnership, cannot be
questioned on review. A partnership may be constituted in any form, and in this case, the partnership
was proven through documentary and testimonial evidence. The partnership should not have been
registered with the Securities and Exchange Commission, as non-registration does not invalidate the
partnership among the partners themselves.