Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

163515 October 31, 2008

ISIDRO T. PAJARILLAGA, Petitioner, vs. COURT OF APPEALS and THOMAS T. KALANGEG, Respondents. DECISION QUISUMBING, Acting C.J.: This is a petition for review on certiorari of the Decision1 dated January 26, 2004 and the Resolution2 dated May 14, 2004 of the Court of Appeals in CAG.R. SP No. 47526. The appellate court affirmed the Orders3 dated January 29, 1998 and March 26, 1998 of the Regional Trial Court (RTC) of Bontoc, Mt. Province, Branch 36, which had denied petitioners Motion for Leave of Court to Take the Deposition of the Defendant Upon Written Interrogatories. The antecedent facts are as follows: On November 24, 1995, private respondent Thomas T. Kalangeg filed with the RTC of Bontoc, Mt. Province, Branch 36, a complaint4 for a sum of money with damages against petitioner Isidro T. Pajarillaga. Since the parties failed to reach an amicable settlement, trial on the merits ensued. On March 10, 1997, private respondent presented his first witness. At the next scheduled hearing on August 8, 1997, neither petitioner nor his counsel appeared despite notice. Upon private respondents motion, the trial court allowed him to present his remaining two witnesses subject to petitioners cross-examination on the next scheduled hearing on September 2, 1997. But when the case was called on that date, petitioner and his counsel were again absent. Upon private respondents motion, the trial court declared petitioner to have waived his right of cross-examination and allowed private respondent to make a formal offer of evidence. In an Order dated October 8, 1997, the trial court admitted all the exhibits formally offered by private respondent. It also scheduled petitioners presentation of evidence on October 28, 29 and 30, 1997. Petitioner moved to reset the hearing to November 17, 1997. The trial court granted his motion and reset the hearing to December 15, 1997. On December 10, 1997, however, petitioner filed a Motion for Leave of Court to Take the Deposition of the Defendant Upon Written Interrogatories5 on the grounds that: (1) petitioner resides in Manila which is more than four hundred (400) kilometers from Bontoc, Mt. Province; and (2) petitioner is suffering from an illness which prohibits him from doing strenuous activities. Private respondent opposed the motion. On December 15, 1997, neither petitioner nor his counsel again appeared. Nonetheless, the trial court reset the case to January 12, 1998 for the presentation of petitioners evidence. What transpired on said date, however, is not disclosed by the records before this Court. In an Order6 dated January 29, 1998, the trial court denied petitioners motion, in this wise: Considering that the above-entitled case has been pending since November 24, 1995, and hearings thereof have been delayed almost always at the instance of the defendant, the latters motion for leave of Court to take said defendants deposition upon written interrogatories at this late stage of the proceedings is hereby denied. Wherefore, in the interest of justice defendant is granted one more chance to adduce his evidence on February 18, 1998, at 8:30 oclock in the morning. Otherwise, he shall be deemed to have waived his right thereto. SO ORDERED. Petitioner moved for reconsideration which the trial court denied. It also reset the hearing to April 20, 1998.7 Petitioner elevated the case to the Court of Appeals via a petition for certiorari under Rule 65 of the 1997 Rules of Court. In affirming the trial courts orders, the appellate court ruled that: First, the denial of petitioners motion was not tainted with grave abuse of discretion since the trial court gave petitioner full opportunity to present his evidence. Second, petitioners motion came much too late in the proceedings since private respondent has already rested his case. Third, the medical certificate which petitioner submitted to validate his allegation of illness merely contained a remark that the "patient is advised to avoid strenuous activity." It did not state that the travel from Manila to Mt. Province for the scheduled hearings was too strenuous to endanger petitioners health. Fourth, the threats to petitioners life by private respondents relatives were belatedly alleged only in his motion for reconsideration.

Dissatisfied, petitioner appealed to this Court on the ground that the Court of Appeals erred in: DENYING PETITIONERS PRAYER THAT HIS DEPOSITION BE TAKEN THROUGH WRITTEN INTERROGATORIES IN CONNECTION WITH A CASE WHICH IS BEING HEARD BY THE REGIONAL TRIAL COURT OF BONTOC, MT. PROVINCE THAT CAN BE REACHED AFTER A GRUELLING SEVEN (7) HOUR RIDE TRAVERSING VERY ROUGH AND RUGGED ROADS.8 Simply stated, the issue is whether the taking of petitioners deposition by written interrogatories is proper under the circumstances obtaining in this case. Petitioner asserts that the trial court should have allowed the taking of his deposition through written interrogatories since: (1) this discovery measure may be availed of by a party as a matter of right; (2) he has good reasons for invoking his right to this discovery measure, i.e., he resides in Manila which is more than four hundred (400) kilometers from Bontoc, Mt. Province and he is suffering from an illness which prohibits him from doing strenuous activities. Petitioner adds that there are serious threats to his life by private respondents relatives. Private respondent counters that petitioner could no longer avail of this discovery measure since the trial court has already given him sufficient time to present his evidence and yet he failed to do so. Private respondent adds that petitioners motion was made purposely to further delay the resolution of the case as it was invoked during the late stage of the proceedings. Private respondent also avers that the medical certificate submitted to show petitioners illness does not contain any statement that he could not travel from Manila to Mt. Province for the scheduled hearings. In fact, the medical certificate was not even notarized. After considering the contentions and submissions of the parties, we are in agreement that the petition lacks merit. Deposition is chiefly a mode of discovery, the primary function of which is to supplement the pleadings for the purpose of disclosing the real points of dispute between the parties and affording an adequate factual basis during the preparation for trial. 9 It should be allowed absent any showing that taking it would prejudice any party. It is accorded a broad and liberal treatment and the liberty of a party to make discovery is well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of law. It is allowed as a departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge, consistent with the principle of promoting just, speedy and inexpensive disposition of every action and proceeding; and provided it is taken in accordance with the provisions of the Rules of Court, i.e., with leave of court if summons have been served, and without such leave if an answer has been submitted; and provided further that a circumstance for its admissibility exists.10 There is nothing in the Rules of Court or in jurisprudence which restricts a deposition to the sole function of being a mode of discovery before trial. Under certain conditions and for certain limited purposes, it may be taken even after trial has commenced and may be used without the deponent being actually called to the witness stand.11 There is no rule that limits deposition-taking only to the period of pre-trial or before it; no prohibition exists against the taking of depositions after pre-trial. There can be no valid objection to allowing them during the process of executing final and executory judgments, when the material issues of fact have become numerous or complicated.12 Such being the case, there is really nothing objectionable, per se, with petitioner availing of this discovery measure after private respondent has rested his case and prior to petitioners presentation of evidence. To reiterate, depositions may be taken at any time after the institution of any action, whenever necessary or convenient. But when viewed vis the several postponements made by petitioner for the initial presentation of his evidence, we are of the view that his timing is, in fact, suspect. The records before us show that petitioner stopped attending the hearings after private respondent presented his first witness. Petitioner offered no excuse for his and his counsels absences. Moreover, the trial court has set four (4) hearing dates for the initial presentation of his evidence. But he merely moved for its resetting without invoking the grounds which he now presents before us. Besides, even as we scrutinize petitioners arguments, we think that he has not sufficiently shown an "exceptional" or "unusual" case for us to grant leave and reverse the trial and appellate courts. Under Section 4, Rule 23 of the Rules of Court, depositions may be used for the trial or for the hearing of a motion or an interlocutory proceeding, under the following circumstances: SEC. 4. Use of depositions. xxxx (c) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds: (1) that the witness is dead; or (2) that the witness resides at a distance more than one hundred (100) kilometers from the place of trial or hearing, or is out of the Philippines, unless it appears that his absence was procured by the party offering the deposition; or (3) that the witness is unable to attend or testify because of age, sickness, infirmity, or imprisonment; or (4) that the party offering the deposition has been unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open court, to allow the deposition to be used; and x x x x13 In this case, petitioner invokes distance and illness to avail of the discovery measure.1avvphi1 We agree with private respondent that the matter of distance could have been settled had petitioner requested for a change of venue earlier in the proceedings. Petitioner has attended the pre-trial and the

hearing where private respondent presented his first witness. He need not await his turn to present evidence before realizing the great inconvenience caused by the enormous distance between his place of residence and the place of hearing. Nor are we inclined to accept petitioners claim of illness. As aptly observed by the Court of Appeals, the medical certificate submitted by petitioner merely contained a remark that the "patient is advised to avoid strenuous activity." It was not alleged that the travel from Manila to Mt. Province for the scheduled hearings was too strenuous to endanger petitioners health. We also agree with the Court of Appeals that the threats to petitioners life by private respondents relatives appear to be a mere afterthought since it was raised only in petitioners motion for reconsideration of the trial courts denial of his motion for leave. We also note that the incident which gave rise to the alleged threats took place prior to the pre-trial. Surely, petitioner could have informed the trial court of this incident had there been truth to, and serious implication of, his allegation. Finally, we must emphasize that while the rules on discovery are liberally constructed so as to ascertain truth and to expedite the disposal of cases, the trial court may disallow a deposition if there are valid reasons for so ruling.14 Here, we find the protracted delay in the litigation at petitioners instance coupled with the belated and unsubstantiated allegations of illness and threats to petitioners life, more than sufficient reasons for the trial court to deny petitioners motion. WHEREFORE, the instant petition is DENIED for lack of merit. The Decision dated January 26, 2004 and the Resolution dated May 14, 2004 of the Court of Appeals in CA-G.R. SP No. 47526, are AFFIRMED. Costs against petitioner. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 148021 December 6, 2006

SIME DARBY EMPLOYEES ASSOCIATION, OSCAR E. PACIS, RAMON C. REYES, FRANCISCO R. REY, ROLITO C. MARTIREZ, RAUL E. BARDE, HELINO A. TIAMSON, JOSE G. AQUINO, ESTANILO M. SAMSON, CELESTINO A. SANTOS, REYNALDO MENDOZA, RAMON A. CIPRIANO, R. CAJAYON, EMMANUEL M. PALIS, JOSELITO DE PAZ, ARNOLD J. DE GUZMAN, BENJAMIN C. DELA PAZ, JR., FERDINAND R. SACLUTI, LAMBERTO S. LOPEZ, JR., GAVINO T. REFUERZO, ORLANDO B. PATENIA, EDWIN H. GULAPA, RUBEN G. CRUZ, REYNALDO E. ATANACIO, CONRADO D. FRANCISCO, JR., CRESENCIO Q. TABADAY, ERNESTO A. IGNACIO, ISAGANI A. RAMOS, DENNIS V. CABUSLAY, SAMUEL G. MAMARADLO, ALANO R. VENTURA, JR., ANGELINO B. HERMONO, MIGUEL K. LUNA, CELEDONIO B. FRONDA, PATRICIO P. ARANTE III, ARSENIO D. CRUZ, LEOCADIO M. CANDELARIA, ARNALDO R. AUREADA, DANILO F. SAN DIEGO, ALEXANDER G. CUEVAS, ROLANDO G. SANTOS, ISABELO V. ANDRES, JR., ARTURO M. LORENZO, JERRY F. SANTIAGO, ARMAND G. MARIANO, REYNALDO YBANEZ, ROSUARDO S. CONDEZ, DINDO CRUZ LAUREANO, ROY A. DE GUZMAN, FICOMEDES P. CALUGAY, RANDOLPH P. RAAGAS, PEDRO A. MAGNO, BENJAMIN P. DELLOMAS, ENRIQUE B. TAMAYO, FERNANDO C. LOPEZ, ROMAN P. NABONG, JULIETO P. DIZON, ROMEO E. SANTOS, PABLO P. CABRERA, JR., NELSON D. ANGELES, RICARDO P. CANLAS, REY L. DE GUZMAN, TANGLAW E. DELA PAZ, LUDIVICO C. LACUNA, ALEXANDER D. PUA, JUANITO L. SANTOS, EDGARDO B. VERZOSA, HILARIO S. MALINAG, ANDRES C. SANTIAGO, DANILO S. MENDOZA, JOSE J. CASTILLO, EDUARDO F. CAYABYAB, EDGARDO C. FLORENCIO, LARRY DELA CRUZ, RODOLFO B. MARIANO, VIRGILIO C. VERGARA, JESUS B. BERNAS, FELICIANO R. PERALTA, HANNIE C. REJUSO, RODELIO L. SATOS, JUAN MATA, EDGARDO A. JOSEF, REYNALDO V. SIMON, JUANITO T. GINEZ, DONARDO C. EVANGELISTA, JUAN ESTAQUIO, RAMON C. MANUEL, EFREN D. GONZALES, DOMINADOR S. HERNANDEZ, MARIO C. DIAZ, JAIME DAVID, REMEGIO T. GAJAYON, JORDAN ALBA V. JIMENEZ, LUCIO I. CAPCO, FRANCISCO FRANCISCO, ALFREDO E. ESTEL, REYNALDO P. MENDOZA, JOEL G. DIZON, ADOLFO J. SANTOS, ROBERTO C. PECSON, JOSE B. GARCIA, GEORGE A. NAGMA, DOMINGO S. CUEVAS, JR., RAMON A. CIPRIANO, ROBERTO A. BUENCONSEJO, VICTOR H. VIZMONTE, EDWARD L. GARCIA, RODRIGO S. MAGBALOT, EMELITO R. DELA PAZ, CARLOS O. RIEGO, REYNALDO MAGALLON, BENJAMIN C. GERON, RODRIGO C. LABRO, EDUARDO N. PAPA, CENON J. CUMAL, EDDIE P. ESPINASE, REYNALDO S. DIAMANTE, RODELIO C. DERPO, VIRGILIO A. SICAT, FELIX G. MARIANO, ARTURO R. APOSTOL, BONIFACIO V. POLICINA, EDIZER R. ALCAIDE, ROLANDO G. SANTOS, MELCHOR A. SAN PASCUAL, ROLANDO FRONDA, SALVADOR B. COPINO, JR., VILLAMOR VELASCO, ARTURO CASILANG, MACARIO S. BERSOLA, LESLIE CASTOR, RAFAEL V. ALANO, ROMEO DE ASIS, RAMILO R. DELA PAZ, JOVENTINO C. OLBIS, RODOLFO M. CERES, ARMANDO C. LLENADO, EDUARDO A. SALVADOR, APOLINARIO F. GAYO, ARNOLD Z. MAXIMO, FLORANTE R. PADIERNOS, DANILO M. EUSEBIO, NOEL D. JEGIRA, NESTOR J. QUIMSON, ANTONIO VILLAMOR, BENITO D. ARIOLA, JOSE D. MALLARI, BRAULIO S. TOLENTINO, JUANITO D. BUNGAY, ARNIEL R. DOMINGO, JESUS V. ESCOTO, MIGUEL L. LIBAO, RODOLFO G. NAYCALO, JR., GREGORIO E. UMARAN. ROMULO J. VILLARAZA, APOLINARIO S. VILLENA, ROLANDO R. LOPEZ, ERNESTO VALEROS, ESTELITO E. DE GUZMAN, ROLANDO F. ADUNA, RONNIE S. MANUEL, MAXIMO B. GRAFIL, TEODORO V. HENSON, ABELARDO P. TORRES, RENATO C. MEDINA, ELDER M. CASIS, LOPE L. MAY, ARMANDO R. LATI, RICARDO C. CASTILLO, ARCADIO C. DELA CRUZ, BAYANI S. DE GUZMAN, BUENAVENTURA D. VILLALON, ESTELITO B. MARQUEZ, JR., DOMINGO L. CECILIO, NOEL A. NEPOMUCENO, GAMIE S. VILLANUEVA, HILARION B. GUTOMAN, NORBERTO H. MURILLO, EFREN I. JACINTO, CEZAR DE JESUS, EDGARDO B. CORONADO, FERNANDO P. DELA CRUZ, CESAR D. AGUIRRE, ELMER S. LITUANIA, RAINIER M. TIAMZON, MARIO M. TIMOTEO, ARMANDO SIGUENZA, AURELIO A. GRIT, ALEJANDRO LIBAO, RONALDO A. BAUTISTA, SERAFINO B. SANTOS, JR., MARIO M. DONEZA, JR., ROMULO F. REVILLA, FERNANDO B. FAUSTO, ROMEO A. IGNACIO, MARIO C. TAYOAN, REYNALDO P. ESGUERRA, MANUEL A. DE GUZMAN, ROBERTO F. VICENTE, HONORIO B. LIGONES, REYNALDO V. FELIPE, CONSTANTINO F. TALAN, FLORENCIO S. ANDRES, MARIO S. ENRIQUEZ, RICARDO M. JOCSON, JR., GIL L. LACSINA, HERNANI C. LINGA, ELMER L. SANTOS, ROBERTO A. BAYLOSIS, ROBERT G. CHRISTENSEN, CESAR APOSTOL, ROBERTO T. CRUZ, CLEMENTE TAGABI, GIL; BARION, NOEL SEGISMUNDO, ROSAURO D. TOPACIO, ET AL.,petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, (THIRD DIVISION), COMMISSIONERS IRENEO B. BERNARDO, LOURDES C. JAVIER, and TITO F. GENILO, SIME DARBY PILIPINAS, INC., SEAN T. OKELLY, RICARDO J. ROMULO, VICENTE PATERNO, LUIS LORENZO, RICARDO ANONAS, ELSI E MAGLAYA, EMMANUEL TAMAYO, RAUL PANLASIGUI, MARTIN S. BERRY, NIK MOHAMED BIN NIK YHAKOB, MOHAMED JAFAR BIN ABDUL and TUNKU TAN SRIDATO SERI AHMAD BIN TUNKU YAHAYA, SD RETREAD SYSTEMS, INC., ET AL., respondents.

DECISION

TINGA, J.: For the Courts adjudication is a petition for review under Rule 45, seeking to set aside the Decision of the Court of Appeals in CA -G.R. SP No. 54424, which affirmed the 30 April 1999 Resolution of the National Labor Relations Commission (NLRC) in NLRC NCR-CNS. 00-09-06571-95, 00-11-07577-95, 00-01-00284-96, CA No. 017268-98.1 The facts of the case, as culled from the findings of the Court of appeals follow. Sometime in October 1995, Sime Darby Employees Association (the Union) submitted its proposal to Sime Darby Pilipinas, Inc. (the Company) for the remaining two (2) years of their then existing Collective Bargaining Agreement (CBA). The company gave its counter-proposal, but the parties failed to reach a mutual settlement. Thus, in a letter to the union president, the company declared a deadlock in the negotiations. Subsequently, the company sought the intervention of the Department of Labor and Employment (DOLE) by filing a Notice of CBA Deadlock and Request for Preventive Mediation.2 Such action did not sit well with the union, which objected to the deadlock. It also filed its opposition to the Assumption of Jurisdiction/Certification to Arbitration. The company filed a Notice of Lockout on 21 June 1995, on the ground of deadlock in the collective bargaining negotiations, docketed as NCMB-NCR-NL-06-01395, and sent a Notice of Lock Out Vote3 dated 24 July 1995 to the National Conciliation and Mediation Board (NCMB). On the other hand, the union conducted its

strike vote referendum on 23 June 1995, and filed its Strike Vote Result Report 4to NCMB also on 24 July 1995, and docketed as NCMB-NCR-NS-Case No. 06-26595. On 06 August 1995, the company declared and implemented a lockout against all the hourly employees of its tire factory on the ground of sabotage 5 and work slowdown. On September 1995, the Union filed a complaint for illegal lockout before the DOLE-NLRC, docketed as NLRC NCR Case No. 00-09-06517-95. Meanwhile, on 19 October 1995, the stockholders of the company approved the sale of the companys tire manufacturing assets a nd business operation. The company issued a memorandum dated 20 October 1995 informing all its employees of the plan to sell the tire manufacturing assets and operations. Consequently, on 27 October 1995, the company filed with the DOLE a Closure and Sale of Tire Manufacturing Operation. On 15 November 1995, the company individually served notices of termination to all the employees, including the individual petitioners.6 On account of the lockout, the employees were barred from entering company premises, and were only allowed to enter to get their personal belongings and their earned benefits on 21-22 November 1995. During said dates, the employees likewise received their separation pay equivalent to 150% of the base rate for every year of credited service; they also signed and executed individual quitclaims and releases. On 24 November 1995, the company filed with the DOLE a Notice of Termination of Employees dated 17 November 1995, covering all its employees in the tire manufacturing and support operations effective 15 December 1995.7 In November 1995, petitioners filed a complaint for Illegal Dismissal before the DOLE, docketed as NLRC NCR Case No. 00-11-07577-95.8 In January of the following year, petitioners filed a complaint for Unfair Labor Practice (ULP), docketed as NLRC-NCR Case No. 00-01-00284-96. The cases for illegal dismissal, illegal lockout and unfair labor practice were then consolidated and eventually assigned to Labor Arbiter Enrico Portillo. On 24 April 1996, the company sold its tire manufacturing plant and facilities to Goodyear Philippines, Inc. (Goodyear) under a Memorandum of Agreement of even date. On 20 August 1996, the company and its officers filed a motion to conduct ocular inspection of the tire factory premises to establish that it was sold to Goodyear.9 The motion was opposed by the union. On 14 July 1998, the company filed a motion for the return of the separation pay received by the complainants, pending the resolution of the case. On 25 August 1998, Labor Arbiter Enrico Angelo C. Portillo issued an Order,10 the dispositive portion of which reads: WHEREFORE, premises considered, the respondents instant motion11 shall be treated in the resolution of the above-caption cases on the merits. In lieu of the continuation of the trial, the parties are hereby given the opportunity to submit their respective memorandum within ten (10) days from receipt hereof, and thereafter the instant cases shall be deemed submitted for resolution without further notice. SO ORDERED.12 On 26 October 1998, the Union, without filing the memorandum as ordered by the labor arbiter, filed an Appeal Memorandum with a petition for injunction and/or a temporary restraining order before the NLRC. On 29 October 1998, the labor arbiter rendered his Decision in the consolidated cases, dismissing for lack of merit petitioners complaints against the company for illegal lockout, illegal dismissal and unfair labor practice. The labor arbiter found the lockout valid and legal, and justified by the incidents of continued work slowdown, mass absences, and consistent low production output, high rate of waste and scrap tires and machine breakdown. Likewise, the consequent mass termination of all the employees was declared to be a valid and authorized termination of employment due to closure of the establishment, the company having complied with the requirements laid down by Article 283 of the Labor Code, i.e., written notice of termination to the employees concerned, a report to the DOLE, and payment of the prescribed separation pay. He added that the companys decision to sell all of its assets was a valid and legitimate exercise of its management prerogative. Anent the claim of unfair labor practice, the labor arbiter found no evidence to substantiate the same, and that the records merely showed that the closure of and eventual cessation from business was justified by the circumstances in order to protect the companys investments and assets. Furthermore, the labor arbiter ruled that the quitclaims and receipts signed by petitioners were voluntarily signed, indicating that the settlement reached by petitioners and the company was just and reasonable. Finally, the labor arbiter declared that the motions for ocular inspection and return of separation pay field by the company are rendered moot and academic in view of said Decision.13 The labor arbiter thus adjudicated: WHEREFORE, foregoing premises considered, the consolidated complaints for illegal lockout, illegal dismissal and unfair labor practice are hereby DISMISSED for lack of merit. The complaint against respondent SD Retread System, is likewise ordered dismissed for failure of the complainants to sufficiently establish and substantiate their claim that the latter and respondent Sime Darby are one and the same company, and for lack of employeremployee relationship. SO ORDERED.14 Petitioners appealed the labor arbiters Decision to the NLRC on 01 December 1998.15 Said appeal, however, was dismissed on 30 April 1999 for lack of merit.16 The NLRC affirmed en toto the labor arbiters Decision. In addition, it ruled that that the labor arbiter could not have lost jurisdiction over the case when petitioners appealed his 25 August 1998 Order since the Order was interlocutory in nature and cannot be appealed separately. Thus, the labor arbiter still had jurisdiction over the consolidated complaints when he issued his Decision. Petitioners prayer for damages and attorneys fee s was also struck down by the NLRC, holding that petitioners are not entitled thereto considering that it was not shown that the dismissal was done in a wanton and oppressive manner.17 Petitioners motion for reconsideration was also denied, prompting them to file a petition for certiorari with the Court of Appeals, claiming grave abuse of discretion on the part of the NLRC.

The Court of Appeals denied the petition for lack of merit and affirmed the Decision of the NLRC. 18 The appellate court declared that the labor arbiters was not divested of its jurisdiction over the consolidated cases when petitioners filed their appeal memorandum on 26 October 1998 since the Order dated 25 August 1998 which they sought to appeal is interlocutory in nature. Thus, the labor arbiters Decision. Thus, the labor arbiters Decisio n has the force and effect of a valid judgment.19 Finding that said Decision was supported by substantial evidence, the appellate court affirmed the dismissal of the complaints against SD Retread System for failure of the petitioners to substantiate the claim of the existence of employer-employee relationship.20 Petitioners sought reconsideration of the Court of Appeals Decision, but their motion was denied for lack of merit.21 In the instant petition, petitioners reiterate that they were denied due process when they were dismissed right on the day they were handed down their termination letters, without the benefit of the thirty (30)-day notice as required by law, and invoke the Courts ruling in Serrano v. NLRC22 They deny having executed quitclaims in favor of the company. Furthermore, petitioners insist that the labor arbiter had lost jurisdictional competence to issue his 29 October 1998 Decision since they have already perfected their appeal on 26 October 1998, making said Decision void ab initio. They likewise claim that the labor arbiter erred when it failed to consider as admitted the matters contained in their Request for Admission after respondents failed to file a sworn answer thereto. Finally, they allege that the decisions of the Court of Appeals and the NLRC lacked evidentiary support. On the other hand, the company asserts that it complied with the 30-day notice requirement under Art. 283 of the Labor Code when it notified the employees on 15 November 1995 that their termination was to take effect on 15 December 1995. In any case, the alleged violation of the thirty (30) day notice requirement was never raised in the proceedings below, except in petitioners supplemental motion for reconsideration of the Court of Appeals Decision. This being the case, the issue of failure to abide by the 30-day notice rule can no longer be raised for the first time on appeal.23 The company points out that the ruling in Serrano24 does not apply to this case sinceSerrano involved the retrenchment of only one employee, Ruben Serrano, from an establishment which remained and continued in business, while in the present scenario, the companys business operation ceased for good, and the employees were furnished individual termination notices thirty (30) days before the actual date of separation.25 The company maintains that the 25 August 1995 Order, being in the nature of an interlocutory order, is unappealable hence, the labor arbiter retained its jurisdiction over the cases even after the Order was "appealed" to the NLRC. It maintains that the decisions of the labor arbiter and the NLRC and the Court of Appeals are supported by substantial evidence. Furthermore, it insists on the legality of the lockout and termination of employment, and denies having committed an unfair labor practice.26 For its part, respondent SD Retread Systems, Inc. argues that it has a separate and distinct entity from Sime Darby Pilipinas, Inc., and hence, denies the existence of an employer-employee relationship with petitioners.27 The petition is bereft of merit. Despite petitioners attempt to phrase its issues to show apparent questions of law, it is obvious that the petition raises m ostly factual issues, which are not proper in a petition for review. Rule 45 of the Rules of Court limits the function of the Court to the review or revision of errors of law and not to a second analysis of the evidence. The Court observes that petitioners come to this Court with the same arguments it presented in the proceedings below, which have been competently discussed and disposed of by the appellate court and the labor tribunals. However, the petition presents two (2) questions of law which need to be addressed, to wit: (i) the alleged loss of jurisdictional competence on the part of the labor arbiter to issue his Decision after petitioners appealed his 25 August 1995 Order, and (ii) that petitioners Request for Admission should have been granted and the evidence included therein should have been admitted since respondents reply/objection thereto were not made under oath.28 The 25 August 1998 Order of the labor arbiter partakes the nature of an interlocutory order, or one which refers to something between the commencement and end of the suit which decides some point or matter but it is not the final decision of the whole controversy.29 An interlocutory order is not appealable until after the rendition of the judgment on the merits for a contrary rule would delay the administration of justice and unduly burden the courts.30 The 25 August 1998 Order merely terminated formal trial of the consolidated cases, declared that the motion for inspection will be dealt with in the resolution of the case, and ordered the submission of the parties respective memoranda after which the case shall be subm itted for resolution. It did not put an end to the issues of illegal lockout, ULP, and illegal dismissal. Being interlocutory in nature, the 25 August 1998 Order could not have been validly appealed such that it would divest the labor arbiter of his jurisdiction over the consolidated cases. This being the case, the labor arbiter still had jurisdiction when he rendered his Decision. Even if petitioners filed a special civil action for certiorari, which would have been the proper remedy, the same would still fail. The Court finds that the labor arbiter did not commit any grave abuse of discretion when he issued the 25 August 1998 Order. For one, the holding of an adversarial trial is discretionary on the labor arbiter and the parties cannot demand it as a matter of right.31 Section 4, Rule V of the New Rules of Procedure of the NLRC32grants a labor arbiter wide latitude to determine, after the submission by the parties of their position papers/memoranda, whether there is need for a formal trial or hearing.33 As this court has so often held, a formal type or trial-type hearing is not at all times and in all instances essential to due process the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of controversy.34 In one case, this Court held that a party has no vested right to a formal hearing simply and merely because the labor arbiter granted its motion and set the case for hearing.35 Related to the issue of jurisdiction is the allegation that the decisions of the Court of Appeals, the NLRC and the labor arbiter are without evidentiary support since the respondent was not able to present a single evidence due to the 25 August 1998 Order of the labor arbiter terminating the trial of the cases and requiring submission of the parties memoranda, and ordaining at the end of the memorandum period the submission of the cases for decision. Petitioners argument that had the labor arbiter allowed respondents to present their evidence during the formal trial, the D ecision would have been different, cannot be sustained. As previously stated, the labor arbiter enjoys wide discretion in determining whether there is a need for a formal hearing in a given case, and he or she may use all reasonable means to ascertain the facts of each case without regard to technicalities. With or without a formal hearing, the labor arbiter may still adequately decide the case since he can resolve the issues on the basis of the pleadings and other documentary evidence previously submitted. When the parties submitted their position papers and other pertinent pleadings to the labor arbiter, it is understood/given/deemed that they have included therein all the pieces of evidence needed to establish their respective cases. The rationale for this rule is explained by the Court in one case, thus: (P)etitioner believes that had there been a formal hearing, the arbiters alleged mistaken reliance on some of the documentar y evidence submitted by parties would have been cured and remedied by them, presumably through the presentation of controverting evidence. Evidently, this postulate is not

in consonance with the need for speedy disposition of labor cases, for the parties may then willfully withhold their evidence and disclose the same only during the formal hearing, thus creating surprises which could merely complicate the issues and prolong the trial. There is a dire need to lessen technicalities in the process of settling labor disputes."36 Elementary is the principle that this court is not a trier of facts. Judicial review of labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which its labor officials findings rest.37 As such, the findings of facts and conclusion of the NLRC are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this Court as long as they are supported by substantial evidence. In the instant case, the Court finds that the labor arbiters decision, which was affirmed by both the NLRC and the Court of Appeals cite as basis thereof the evidence pre sented by both the petitioners and respondents in their pleadings. It is no longer the Courts function to assess and evaluate all over again the evidence, test imonial and documentary, adduced by the parties to an appeal, particularly where the findings of both the labor arbiter, the NLRC and the appellate court trial court on the matter coincide, as in this case at bar.38 The submission that petitioners Request for Admission should have been deemed admitted in their favor after respondents had failed to file a sworn reply or objection thereto cannot be sustained. A request for admission is a remedy provided by Rule 26 of the Rules of Court, which allows a party to file and serve upon any other party a written request for the admission of : (i) the genuineness of any material and relevant document described in and exhibited with the request; or (ii) the truth of any material and relevant matter of fact set forth in the request. Said request must be answered under oath within the period indicated in the request, otherwise the matters of which admission were requested should be deemed admitted. Petitioners claim that respondents, instead of filing an answer under oath, filed an unsworn reply/objection thereto. Thus, the admissions should be deemed admitted in their favor. Petitioners Request for Admission does not fall under Rule 26 of the Rules of Court. A review of said Request for Admission shows that it contained matters which are precisely the issues in the consolidated cases, and/or irrelevant matters; for example, the reasons behind the lockout, t he companys motive in the CBA negotiations, lack of notice of dismissal, the validity of the release and quitclaim, etc.39 Rule 26 as a mode of discovery contemplates of interrogatories that would clarify and tend to shed light on the truth or falsity of the allegations in a pleading. That is its primary function. It does not refer to a mere reiteration of what has already been alleged in the pleadings.40 Otherwise stated, petitioner's request constitutes "an utter redundancy and a useless, pointless process which the respondent should not be subjected to." The rule on admission as a mode of discovery is intended "to expedite trial and to relieve parties of the costs of proving facts which will not be disputed on trial and the truth of which can be ascertained by reasonable inquiry." Thus, if the request for admission only serves to delay the proceedings by abetting redundancy in the pleadings, the intended purpose for the rule will certainly be defeated.41 More importantly, well-settled is the rule that hearings and resolutions of labor disputes are not governed by the strict and technical rules of evidence and procedure observed in the regular courts of law. Technical rules of procedure are not applicable in labor cases, but may apply only by analogy or in a suppletory character, for instance, when there is a need to attain substantial justice and an expeditious, practical and convenient solution to a labor problem.42 In view of the nature of the matters requested for admission by the petitioners, their request for admission would have only served to delay the proceedings. One final note. Petitioners claim that the alleged failure of the company to notify them of their termination renders their dismissal illegal, and thus they should be reinstated and paid with full backwages or given separation pay, following the Courts ruling in Serrano v. Court of Appeals. The argument does not hold. The ruling in Serranohas already been superseded by the case of Agabon v. National Labor Relation Commission.43 The Agabonenunciates the new doctrine that if the dismissal is for just cause but statutory due process was not observed, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.44 But in any case, the issue of illegal dismissal had already been resolved by the NLRC and the Court of Appeals, which both found that the company had an authorized cause and had complied with the requirements of due process when it dismissed petitioners. WHEREFORE, the petition is DENIED and the Decision dated 31 July 2000 in CA-G.R. SP No. 54424 is AFFIRMED. SO ORDERED.

Quisumbing, J., Chairperson, Carpio, Carpio Morales, and Velasco, Jr, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 90478 November 21, 1991 REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT), petitioner, vs. SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and DOMINADOR R. SANTIAGO, respondents.

Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco, Jr.

NARVASA, J.:p Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago together with Ferdinand E. Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R. Tantoco, and Maria Lourdes Tantoco-Pineda-are defendants in Civil Case No. 0008 of the Sandiganbayan. The case was commenced on July 21, 1987 by the Presidential Commission on Good Government (PCGG) in behalf of the Republic of the Philippines. The complaint which initiated the action was denominated one "for reconveyance, reversion, accounting, restitution and damages," and was avowedly filed pursuant to Executive Order No. 14 of President Corazon C. Aquino. After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer, jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT AND FOR BILL OF PARTICULARS OF OTHER PORTIONS" dated Nov. 3, 1987. 1 The PCGG filed an opposition thereto, 2 and the movants, a reply to the opposition. 3 By order dated January 29, 1988, the Sandiganbayan, in order to expedite proceedings and accommodate the defendants, gave the PCGG forty-five (45) days to expand its complaint to make more specific certain allegations. 4 Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of the Rules of Court" dated February 1, 1988, and "Interrogatories under Rule 25." 5 Basically, they sought an answer to the question: "Who were the Commissioners of the PCGG (aside from its Chairman, Hon. Ramon Diaz, who verified the complaint) who approved or authorized the inclusion of Messrs. Bienvenido R . Tantoco, Jr. and Dominador R. Santiago as defendants in the . . case?" 6 The PCGG responded by filing a motion dated February 9, 1988 to strike out said motion and interrogatories as being impertinent, "queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is improper, impertinent and irrelevant under any guise." 7 On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an Expanded Complaint.8 As this expanded complaint, Tantoco and Santiago reiterated their motion for bill of particulars, through a Manifestation dated April 11, 1988. 9 Afterwards, by Resolution dated July 4, 1988, 10 the Sandiganbayan denied the motion to strike out, for bill of particulars, and for leave to file interrogatories, holding them to be without legal and factual basis. Also denied was the PCGG's motion to strike out impertinent pleading dated February 9, 1988. The Sandiganbayan declared inter alia the complaint to be "sufficiently definite and clear enough," there are adequate allegations . . which clearly portray the supposed involvement and/or alleged participation of defendants-movants in the transactions described in detail in said Complaint," and "the other matters sought for particularization are evidentiary in nature which should be ventilated in the pre-trial or trial proper . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave of court is premature . . (absent) any special or extraordinary circumstances . . which would justify . . (the same)." Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18, 1988. 11 In response, the PCGG presented a "Reply to Answer with Motion to Dismiss Compulsory Counterclaim " 12 The case was set for pre-trial on July 31, 1989. 13 On July 25, 1989, the PCGG submitted its PRE-TRIAL. 14 The pre-trial was however reset to September 11, 1989, and all other parties were required to submit pre-trial briefs on or before that date. 15 On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated "Interrogatories to Plaintiff," 16 and on August 2, 1989, an "Amended Interrogatories to Plaintiff"' 17 as well as a Motion for Production and Inspection of Documents. 18 The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's amended complaint, through such questions, for instance, as 1. In connection with the allegations . . in paragraph 1 . ., what specific property or properties does the plaintiff claim it has the right to recover from defendants Tantoco, Jr. and Santiago for being ill-gotten? 3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . . were committed by defendants Tantoco,

Jr. and Santiago in "concert with" defendant Ferdinand Marcos and in furtherance or pursuit, of the alleged systematic plan of said defendant Marcos to accumulate ill-gotten wealth?"

5. In connection with . . paragraph 13 . ., what specific act or acts of the defendants Tantoco, Jr. and Santiago . . were committed

by said defendants as part, or in furtherance, of the alleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?
7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case that Tourist Duty Free Shops, Inc.,

including all the assets of said corporation, are beneficially owned by either or both defendants Ferdinand and Imelda Marcos and that the defendants Tantoco, Jr. and Santiago, as well as, the other stockholders of record of the same corporation are mere "dummies" of said defendants Ferdinand and /or Imelda R. Marcos?
On the other hand, the motion for production and inspection of documents prayed for examination and copying of 1) the "official records and other evidence" on the basis of which the verification of the Amended Complaint asserted that the allegations thereof are "true and correct;" 2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and . . marked as exhibits for the plaintiff;" and 3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and the decision (of the Chairman and members) to file the complaint" in the case at bar. By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the Amended Interrogatories and granted the motion for production and inspection of documents (production being scheduled on September 14 and 15, 1989), respectively. On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989 (allowing production and inspection of documents). It argued that 1) since the documents subject thereof would be marked as exhibits during the pre-trial on September 11, 1989 anyway, the order for "their production and inspection on September 14 and 15, are purposeless and unnecessary;" 2) movants already know of the existence and contents of the document which "are clearly described . . (in) plaintiff's Pre-Trial Brief;" 3) the documents are "privileged in character" since they are intended to be used against the PCGG and/or its Commissioners in violation of Section 4, Executive Order No. 1, viz.: (a) No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this Order. (b) No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative, or administrative proceeding concerning matters within its official cognizance. It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19 which the Sandiganbayan treated as a motion for reconsideration of the Resolution of August 21, 1989 (admitting the Amended Interrogatories). The opposition alleged that 1) the interrogatories "are not specific and do not name the person to whom they are propounded . .," or "who in the PCGG, in particular, . . (should) answer the interrogatories;" 2) the interrogatories delve into "factual matters which had already been decreed . . as part of the proof of the Complaint upon trial . .;" 3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which defendants . . sought to . . (extract) through their aborted Motion for Bill of Particulars;" 4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and irregularly utilized . . (since) the order of trial calls for plaintiff to first present its evidence." Tantoco and Santiago filed a reply and opposition on September 18, 1989. After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first, denying reconsideration (of the Resolution allowing production of documents), and the second, reiterating by implication the permission to serve the amended interrogatories on the plaintiff (PCGG). 20 Hence, this petition for certiorari. The PCGG contends that said orders, both dated September 29, 1989, should be nullified because rendered with grave abuse of discretion amounting to excess of jurisdiction. More particularly, it claims

a) as regards the order allowing the amended interrogatories to the plaintiff PCGG: 1) that said interrogatories are not specific and do not name the particular individuals to whom they are propounded, being addressed only to the PCGG; 2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying the movants' motion for bill of particulars) had already declared to be part of the PCGG's proof upon trial; and 3) that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related issuances; and b) as regards the order granting the motion for production of documents: 1) that movants had not shown any good cause therefor; 2) that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's exhibits, and the movants had viewed, scrutinized and even offered objections thereto and made comments thereon; and 3) that the other documents sought to be produced are either (a) privileged in character or confidential in nature and their use is proscribed by the immunity provisions of Executive Order No. 1, or (b) non-existent, or mere products of the movants' suspicion and fear. This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan to desist from enforcing its questioned resolutions of September 29, 1989 in Civil Case No. 0008. 21 After the issues were delineated and argued at no little length by the parties, the Solicitor General withdrew "as counsel for plaintiff . . with the reservation, however, conformably with Presidential Decree No. 478, the provisions of Executive Order No. 292, as well as the decisional law of 'Orbos v. Civil Service Commission, et al.,' (G.R. No. 92561, September 12, 1990) 22 to submit his comment/observation on incidents/matters pending with this . . Court if called for by circumstances in the interest of the Government or if he is so required by the Court." 23 This, the Court allowed by Resolution dated January 21, 1991. 24 Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which the Solicitor General had withdrawn would henceforth be under his (Maceren's) charge "and/or any of the following private attorneys: Eliseo B. Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other attorneys as it may later authorize." 25 The facts not being in dispute, and it appearing that the parties have fully ventilated their respective positions, the Court now proceeds to decide the case. Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court: interrogatories to parties , 26 and production and inspection of documents and things. 27 Now, it appears to the Court that among far too many lawyers (and not a few judges), there is, if not a regrettable unfamiliarity and even outright ignorance about the nature, purposes and operation of the modes of discovery, at least a strong yet unreasoned and unreasonable disinclination to resort to them which is a great pity for the intelligent and adequate use of the deposition-discovery mechanism, coupled with pre-trial procedure, could, as the experience of other jurisdictions convincingly demonstrates, effectively shorten the period of litigation and speed up adjudication. 28 Hence, a few words about these remedies is not at all inappropriate. The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential function is accomplished by first, the ascertainment of all the material and relevant facts from the pleadings and from the evidence adduced by the parties, and second, after that determination of the facts has been completed, by the application of the law thereto to the end that the controversy may be settled authoritatively, definitely and finally. It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied with assuring that all the facts are indeed presented to the Court; for obviously, to the extent that adjudication is made on the basis of incomplete facts, to that extent there is faultiness in the approximation of objective justice. It is thus the obligation of lawyers no less than of judges to see that this objective is attained; that is to say, that there no suppression, obscuration, misrepresentation or distortion of the facts; and that no party be unaware of any fact material a relevant to the action, or surprised by any factual detail suddenly brought to his attention during the trial. 29 Seventy-one years ago, in Alonso v. Villamor, 30 this Court described the nature and object of litigation and in the process laid down the standards by which judicial contests are to be conducted in this jurisdiction. It said: A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is, rather a contest in whicheach contending party fully and fairly lays before the court

the facts in issue and then brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done on the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts

its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts. There should be no vested right in technicalities. . . . The message is plain. It is the duty of each contending party to lay before the court the facts in issue-fully and fairly; i.e., to present to the court all the material and relevant facts known to him, suppressing or concealing nothing, nor preventing another party, by clever and adroit manipulation of the technical rules of pleading and evidence, from also presenting all the facts within his knowledge. Initially, that undertaking of laying the facts before the court is accomplished by the pleadings filed by the parties; but that, only in a very general way. Only "ultimate facts" are set forth in the pleadings; hence, only the barest outline of the facfual basis of a party's claims or defenses is limned in his pleadings. The law says that every pleading "shall contain in a methodical and logical form, a plain, concise and direct statement of theultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts." 31 Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too generally or "not averred with sufficient definiteness or particularity to enable . . (an adverse party) properly to prepare his responsive pleading or to prepare for trial," a bill of particulars seeking a "more definite statement" may be ordered by the court on motion of a party. The office of a bill of particulars is, however, limited to making more particular or definite the ultimate facts in a pleading It is not its office to supply evidentiary matters. And the common perception is that said evidentiary details are made known to the parties and the court only during the trial, when proof is adduced on the issues of fact arising from the pleadings. The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties before the trial if not indeed even before the pre-trial should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but also those known to adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample discovery before trial, under proper regulation, accomplished one of the most necessary of modern procedure: it not only eliminates unessential issue from trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. . ." 32 As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the pleadings. The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before trials and thus prevent that said trials are carried on in the dark. 33 To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as a witness to testify orally at trial. The inquiry extends to all facts which are relevant, whether they be ultimate or evidentiary, excepting only those matters which are privileged. The objective is as much to give every party the fullest possible information of all the relevant facts before the trial as to obtain evidence for use upon said trial. The principle is reflected in Section 2, Rule 24 (governing depositions)34 which generally allows the examination of a deponent 1) "regarding any matter, not privileged, which is relevant to the subject of the pending action, whether relating to the claim or defense of any other party;" 2) as well as: (a) "the existence, description, nature, custody, condition and location of any books, documents, or other tangible things" and (b) "the identity and location of persons having knowledge of relevant facts." What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of persons having knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of "fishing expedition" serve to preclude a party from inquiring into the facts underlying his opponent's case. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility, of surprise, . . . 35 In line with this principle of according liberal treatment to the deposition-discovery mechanism, such modes of discovery as (a) depositions (whether by oral examination or written interrogatories) under Rule 24, (b) interrogatories to parties under Rule 25, and (c) requests for admissions under Rule 26, may be availed of without leave of court, and generally, without court intervention. The Rules of Court explicitly provide that leave of court is not necessary to avail of said modes of discovery after an answer to the complaint has been served. 36 It is only when an answer has not yet been filed (but after jurisdiction has been obtained over the defendant or property subject of the action) that prior leave of court is needed to avail of these modes of discovery, the reason being that at that time the issues are not yet joined and the disputed facts are not clear. 37 On the other hand, leave of court is required as regards discovery by (a) production or inspection of documents or things in accordance with Rule 27, or (b) physical and mental examination of persons under Rule 28, which may be granted upon due application and a showing of due cause.

To ensure that availment of the modes of discovery is otherwise untrammeled and efficacious, the law imposes serious sanctions on the party who refuses to make discovery, such as dismissing the action or proceeding or part thereof, or rendering judgment by default against the disobedient party; contempt of court, or arrest of the party or agent of the party; payment of the amount of reasonable expenses incurred in obtaining a court order to compel discovery; taking the matters inquired into as established in accordance with the claim of the party seeking discovery; refusal to allow the disobedient party support or oppose designated claims or defenses; striking out pleadings or parts thereof; staying further proceedings. 38 Of course, there are limitations to discovery, even when permitted to be undertaken without leave and without judicial intervention. "As indicated by (the) Rules . . ., limitations inevitably arise when it can be shown that the examination is being conducted in bad faith or in such a manner as to annoy, embarass, or oppress the person subject to the inquiry. 39 And . . . further limitations come into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege." 40 In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law. It is in light of these broad principles underlying the deposition-discovery mechanism, in relation of course to the particular rules directly involved, that the issues in this case will now be resolved. The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules of Court cannot be sustained. It should initially be pointed out as regards the private respondents "Motion for Leave to File Interrogatories" dated February 1, 1988 41 that it was correct for them to seek leave to serve interrogatories, because discovery was being availed of beforean answer had been served. In such a situation, i.e., "after jurisdiction has been obtained over any defendant or over property subject of the action" but before answer, Section 1 of Rule 24 (treating of depositions), in relation to Section 1 of Rule 25 (dealing with interrogatories to parties) explicitly requires "leave of court." 42 But there was no need for the private respondents to seek such leave to serve their "Amended Interrogatories to Plaintiff" (dated August 2, 1989 43) after they had filed their answer to the PCGG's complaint, just as there was no need for the Sandiganbayan to act thereon. 1. The petitioner's first contention that the interrogatories in question are defective because they (a) do not name the particular individuals to whom they are propounded, being addressed only to the PCGG, and (b) are "fundamentally the same matters . . (private respondents) sought to be clarified through their aborted Motion . . for Bill of Particulars" are untenable and quickly disposed of. The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if the party served with interrogatories is a juridical entity such as "a public or private corporation or a partnership or association," the same shall be "answered . . by any officer thereof competent to testify in its behalf." There is absolutely no reason why this proposition should not be applied by analogy to the interrogatories served on the PCGG. That the interrogatories are addressed only to the PCGG, without naming any specific commissioner o officer thereof, is utterly of no consequence, and may not be invoked as a reason to refuse to answer. As the rule states, the interrogatories shall be answered "by any officer thereof competent to testify in its behalf." That the matters on which discovery is desired are the same matters subject of a prior motion for bill of particulars addressed to the PCGG's amended complaint and denied for lack of merit is beside the point. Indeed, as already pointed out above, a bill of particulars may elicit only ultimate facts, not so-called evidentiaryfacts. The latter are without doubt proper subject of discovery. 44 Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at them disproves the argument. The interrogatories are made to relate to individual paragraphs of the PCGG's expanded complaint and inquire about details of the ultimate facts therein alleged. What the PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of relevancy, or privilege, or that the inquiries are being made in bad faith, or simply to embarass or oppress it. 45 But until such an objection is presented and sustained, the obligation to answer subsists. 2. That the interrogatories deal with factual matters which will be part of the PCGG's proof upon trial, is not ground for suppressing them either. As already pointed out, it is the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all parties even before trial, this being deemed essential to proper litigation. This is why either party may compel the other to disgorge whatever facts he has in his possession; and the stage at which disclosure of evidence is made is advanced from the time of trial to the period preceding it. 3. Also unmeritorious is the objection that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related issuances. In the first place, there is nothing at all wrong in a party's making his adversary his witness .46 This is expressly allowed by Section 6, Rule 132 of the Rules of Court,viz.: Sec. 6. Direct examination of unwilling or hostile witnesses. A party may . . . call an adverse party or an officer, director, or managing agent of a public or private corporation or of a partnership or association which is an adverse party, and interrogate him by leading questions and contradict and impeach him in all respects as if he had been called by the adverse party, and the witness thus called may be contradicted and impeached by or on behalf of the adverse party also, and may be cross-examined by the adverse party only upon the subject-matter of his examination in chief. The PCGG insinuates that the private respondents are engaged on a "fishing expedition," apart from the fact that the information sought is immaterial since they are evidently meant to establish a claim against PCGG officers who are not parties to the action. It suffices to point out that "fishing expeditions" are precisely permitted through the modes of discovery. 47 Moreover, a defendant who files a counterclaim against the plaintiff is allowed by the Rules to implead persons (therefore strangers to the action) as additional defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the Rules, to wit:

Sec. 14. Bringing new parties. When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if jurisdiction over them can be obtained." The PCGG's assertion that it or its members are not amenable to any civil action "for anything done or omitted in the discharge of the task contemplated by . . (Executive) Order (No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of facto relevant to the action and which are not self-incriminatory or otherwise privileged is one thing; the matter of whether or not liability may arise from the facts disclosed in light of Executive Order No. 1, is another. No doubt, the latter proposition may properly be set up by way of defense in the action. The apprehension has been expressed that the answers to the interrogatories may be utilized as foundation for a counterclaim against the PCGG or its members and officers. They will be. The private respondents have made no secret that this is in fact their intention. Withal, the Court is unable to uphold the proposition that while the PCGG obviously feels itself at liberty to bring actions on the basis of its study and appreciation of the evidence in its possession, the parties sued should not be free to file counterclaims in the same actions against the PCGG or its officers for gross neglect or ignorance, if not downright bad faith or malice in the commencement or initiation of such judicial proceedings, or that in the actions that it may bring, the PCGG may opt not to be bound by rule applicable to the parties it has sued, e.g., the rules of discovery. So, too, the PCGG's postulation that none of its members may be "required to testify or produce evidence in any judicial . . proceeding concerning matters within its official cognizance," has no application to a judicial proceeding it has itself initiated. As just suggested, the act of bringing suit must entail a waiver of the exemption from giving evidence; by bringing suit it brings itself within the operation and scope of all the rules governing civil actions, including the rights and duties under the rules of discovery. Otherwise, the absurd would have to be conceded, that while the parties it has impleaded as defendants may be required to "disgorge all the facts" within their knowledge and in their possession, it may not itself be subject to a like compulsion. The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued without its consent. But it is axiomatic that in filing an action, it divests itself of its sovereign character and sheds its immunity from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or preferred status to the State, even while assuming to represent or act for the State. 48 The suggestion 49 that the State makes no implied waiver of immunity by filing suit except when in so doing it acts in, or in matters concerning, its proprietary or non-governmental capacity, is unacceptable; it attempts a distinction without support in principle or precedent. On the contrary The consent of the State to be sued may be given expressly or impliedly. Express consent may be manifested either through a general law or a special law. Implied consent is given when the State itself commences litigation or when it enters into a contract. 50 The immunity of the State from suits does not deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to private litigants. In short, by taking the initiative in an action against the private parties, the state surrenders its privileged position and comes down to the level of the defendant. The latter automatically acquires, within certain limits, the right to set up whatever claims and other defenses he might have against the state. . . . (Sinco, Philippine Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 L. ed. 899)" 51 It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held that where private property has been taken in expropriation without just compensation being paid, the defense of immunity from suit cannot be set up by the State against an action for payment by the owner. 52 The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the Sandiganbayan's Order for the production and inspection of specified documents and things allegedly in its possession. The Court gives short shrift to the argument that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's exhibits, the movants having in fact viewed, scrutinized and even offered objections thereto and made comments thereon. Obviously, there is nothing secret or confidential about these documents. No serious objection can therefore be presented to the desire of the private respondents to have copies of those documents in order to study them some more or otherwise use them during the trial for any purpose allowed by law. The PCGG says that some of the documents are non-existent. This it can allege in response to the corresponding question in the interrogatories, and it will incur no sanction for doing so unless it is subsequently established that the denial is false. The claim that use of the documents is proscribed by Executive Order No. 1 has already been dealt with. The PCGG is however at liberty to allege and prove that said documents fall within some other privilege, constitutional or statutory. The Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and inspection of the documents subject of the motion dated August 3, 1989. 53 Some of the documents are, according to the verification of the amended complaint, the basis of several of the material allegations of said complaint. Others, admittedly, are to be used in evidence by the plaintiff. It is matters such as these into which inquiry is precisely allowed by the rules of discovery, to the end that the parties may adequately prepare for pre-trial and trial. The only other documents sought to be produced are needed in relation to the allegations of the counterclaim. Their relevance is indisputable; their disclosure may not be opposed. One last word. Due no doubt to the deplorable unfamiliarity respecting the nature, purposes and operation of the modes of discovery earlier mentioned, 54 there also appears to be a widely entertained idea that application of said modes is a complicated matter, unduly expensive and dilatory.

Nothing could be farther from the truth. For example, as will already have been noted from the preceding discussion, all that is entailed to activate or put in motion the process of discovery by interrogatories to parties under Rule 25 of the Rules of Court, is simply the delivery directly to a party of a letter setting forth a list of least questions with the request that they be answered individually. 55 That is all. The service of such a communication on the party has the effect of imposing on him the obligation of answering the questions "separately and fully in writing underoath," and serving "a copy of the answers on the party submitting the interrogatories within fifteen (15) days after service of the interrogatories . . ." 56 The sanctions for refusing to make discovery have already been mentioned. 57 So, too, discovery under Rule 26 is begun by nothing more complex than the service on a party of a letter or other written communication containing a request that specific facts therein set forth and/or particular documents copies of which are thereto appended, be admitted in writing. 58 That is all. Again, the receipt of such a communication by the party has the effect of imposing on him the obligation of serving the party requesting admission with "a sworn statement either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he cannot truthfully either admit or deny those matters," failing in which "(e)ach of the matters of which admission is requested shall be deemed admitted." 59 The taking of depositions in accordance with Rule 24 (either on oral examination or by written interrogatories) while somewhat less simple, is nonetheless by no means as complicated as seems to be the lamentably extensive notion. WHEREFORE, the petition is DENIED, without pronouncement as to costs. The temporary restraining order issued on October 27, 1989 is hereby LIFTED AND SET ASIDE. SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur. Melencio-Herrera, J., I also join Justice Cruz's concurrence. Romero, J., took no part.

Separate Opinions

CRUZ, J., concurring: I am delighted to concurr with Mr. Justice Andres R. Narvasa in his scholarly ponencia which, besides reaching a conclusion sustained by the applicable law and jurisprudence, makes for reading both pleasurable and instructive. One function of the court not generally appreciated is to educate the reader on the intricacies and even the mustique of the law. The opinion performs this function with impressive expertise and makes the modes of discovery less esoteric or inaccessible to many members of the bar.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 108229 August 24, 1993 DASMARIAS GARMENTS, INC., petitioner, vs. HON. RUBEN T. REYES, Judge, Regional Trial Court, Manila, Branch 50, and AMERICAN PRESIDENT LINES, LTD., respondents.

Sobrevias, Diaz, Haudini & Bodegon Law Offices for petitioner. Tan, Manzano & Velez Law Offices for private respondent.

RESOLUTION NARVASA, C.J.: Sometime in September, 1987, in the Regional Trial Court of Manila, the American President Lines, Ltd. sued Dasmarias Garments, Inc. to recover the sum of US $53,228.45 as well as an amount equivalent to twenty-five percent (25%) thereof as attorney's fees and litigation expenses. In its answer dated December 1, 1987, Dasmarias Garments, Inc. (hereafter, simply Dasmarias) specifically denied any liability to the plaintiff (hereafter simply APL), and set up compulsory counterclaims against it. The case was in due course scheduled for trial on April 27, 1988. On that date APL presented its first witness whose testimony was completed on November 12, 1988. The case was reset to May 3, 1989 for reception of the testimony of two (2) more witnesses in APL's behalf. At the hearing of May 3, 1989, instead of presenting its witnesses, APL filed a motion praying that it intended to take the depositions of H. Lee and Yeong Fang Yeh in Taipei, Taiwan and prayed that for this purpose, a "commission or letters rogatory be issued addressed to the consul, vice-consul or consular agent of the Republic of the Philippines in Taipei . . . " Five (5) days later APL filed an amended motion stating that since the Philippine Government has no consulate office in Taiwan in view of its "one China policy," there being in lieu thereof an office set up by the President "presently occupied by Director Joaquin Roces which is the Asia Exchange Center, Inc.," it was necessary and it therefore prayed "that commission or letters rogatory be issued addressed to Director Joaquin Roces, Executive Director, Asian Executive Exchange Center, Inc., Room 901, 112 Chunghsiao, E. Road, Section 1, Taipe, Republic of China, to hear and take the oral deposition of the aforenamed persons . . . ." The motion was opposed by Dasmarias. It contended that (a) the motion was "fatally defective in that it does not seek . . . that a foreign court examine a person within its jurisdiction;" (b) issuance of letters rogatory was unnecessary because the witnesses "can be examined before the Philippine Court;" and (c) the Rules of Court "expressly require that the testimony of a witness must be taken orally in open court and not by deposition." Extensive argument on the matter thereafter followed, through various pleadings filed by the parties, in the course of which APL submitted to the Trial Court (a) the letter received by its counsel from Director Joaquin R. Roces of the Asian Exchange Center, Inc., dated November 20, 1989, advising that "this Office can only take deposition upon previous authority from the Department of Foreign Affairs," this being "in consonance with the Supreme Court Administrative Order requiring courts or judicial bodies to course their requests through the Department of Foreign Affairs;" and (b) a letter sent by "fax" to the same counsel by a law firm in Taipei, Lin & Associates Maritime Law Office, transmitting information inter alia of the mode by which, under the "ROC Civil Procedure Code," "a copy or an abridged copy" of documents on file with a Taiwan Court may be obtained. By Order dated March 15, 1991, the Trial Court resolved the incident in favor of APL, disposing as follows: ACCORDINGLY, the motion to take testimonies of plaintiff's Taiwanese witnesses, Kenneth H. Lee and Yeong Fah Yeh, by deposition (upon written interrogatories) is hereby GRANTED. The Asian Exchange Center, Inc. thru Director Joaquin R. Roces is hereby COMMISSIONED to take down the deposition. Compliance with the Rules on the taking of testimony by deposition upon written interrogatories under Sections 25-29 of Rule 24, Rules of Court is enjoined. Let this Order be coursed through the Department of Foreign Affairs, Manila, pursuant to Supreme Court Administrative Circular No. 4 dated April 6, 1987. The Court opined that "the Asian Exchange Center, Inc. being the authorized Philippine representative in Taiwan, may take the testimonies of plaintiff's witnesses residing there by deposition, but only upon written interrogatories so as to give defendant the opportunity to cross-examine the witnesses by serving cross-examination."

Dasmarias sought reconsideration by motion filed June 25, 1991 on the following grounds: (1) authority of the Asian Exchange Center, Inc. (AECI) to take depositions has not been established, it not being one of those so authorized by the Rules of Court to take depositions in a foreign state; (2) AECI's articles of incorporation show that it is not vested with any such authority; (3) to permit deposition-taking by commission without the authority of the foreign state in which deposition is taken constitutes infringement of judicial sovereignty; and (4) depositions by written interrogatories have inherent limitations and are not suitable to matters dependent on the credibility of witnesses; oral testimony in open court remains the "most satisfactory method of investigation of facts'" and "'affords the greatest protection to the rights and liberties of citizens." By Order dated July 5, 1991, the motion for reconsideration was denied because "filed out of time" and being a mere rehash of arguments already passed upon. In the same Order, APL was directed "to take the necessary steps to implement the order authorizing the . . . (deposition-taking) of its witnesses not later than the end of this month, otherwise the Court will consider inaction or lack of interest as waiver to adduce additional evidence by deposition." Dasmarias instituted a special civil action of certiorari in the Court of Appeals to nullify the orders of the Trial Court just described. Said Appellate Court restrained enforcement of the orders of March 15, 1991 and July 5, 1991 "in order to maintain the status quo and to prevent the infliction of irreparable damage and injury upon the petitioner." After due proceedings, the Court of Appeals (Third Division) rendered judgment on September 23, 1992 denying Dasmarias petition for certiorari and upholding the challenged orders of the Trial Court. Once again, Dasmarias sought reconsideration of an adverse disposition, and once again, was rebuffed. Its motion for reconsideration was denied in a Resolution of the Court of Appeals dated December 11, 1992. Once again Dasmarias has availed of the remedy of appeal. It has come to this Court and prays for the reversal of the Appellate Court's Decision of September 23, 1992 and Resolution dated December 11, 1992. Once again, it will fail. Dasmarias ascribes to the Court of Appeals the following errors, to wit: 1) "in holding that a party could, during the trial of the case, present its evidence by taking the deposition of its witnesses in a foreign jurisdiction before a private entity not authorized by law to take depositions in lieu of their oral examination in open Court considering that: a) the taking of deposition is a mode of pretrial discovery to be availed of before the action comes to trial; b) no urgent or compelling reason has been shown to justify the departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge;" 2) "in disregarding the inherently unfair situation in allowing private respondent, a foreign entity suing in the Philippines, to present its evidence by mere deposition of its witnesses away from the 'penetrating scrutiny' of the trial Judge while petitioner is obligated to bring and present its witnesses in open court subject to the prying eyes and probing questions of the Judge;" and 3) "in sanctioning the deposition taking of . . . (APL's) witnesses in Taipei, Taiwan, a foreign jurisdiction not recognized by the Philippines in view of its 'one-China policy,' before the AECI, a private entity not authorized by law to take depositions." Depositions are chiefly a mode of discovery. They are intended as a means to compel disclosure of facts resting in the knowledge of a party or other person which are relevant in some suit or proceeding in court. Depositions, and the other modes of discovery (interrogatories to parties; requests for admission by adverse party; production or inspection of documents or things; physical and mental examination of persons) are meant to enable a party to learn all the material and relevant facts, not only known to him and his witnesses but also those known to the adverse party and the latter's own witnesses. In fine, the object of discovery is to make it possible for all the parties to a case to learn all the material and relevant facts, from whoever may have knowledge thereof, to the end that their pleadings or motions may not suffer from inadequacy of factual foundation, and all the relevant facts may be clearly and completely laid before the Court, without omission or suppression. Depositions are principally made available by law to the parties as a means of informing themselves of all the relevant facts; they are not therefore generally meant to be a substitute for the actual testimony in open court of a party or witness. The deponent must as a rule be presented for oral examination in open court at the trial or hearing. This is a requirement of the rules of evidence. Section 1, Rule 132 of the Rules of Court provides: Sec. 1. Examination to be done in open court. The examination of witnesses presented in a trial or hearing shall be done in open court, and under oath or affirmation. Unless the witness is incapacitated to speak, or the question calls for a different mode of answer, the answers of the witness shall be given orally. Indeed, any deposition offered to prove the facts therein set out during a trial or hearing, in lieu of the actual oral testimony of the deponent in open court, may be opposed and excluded on the ground that it is hearsay; the party against whom it is offered has no opportunity to cross-examine the deponent at the time that his testimony is offered. It matters not that that opportunity for cross-examination was afforded during the taking of the deposition; for normally, the opportunity for cross-examination must be accorded a party at the time that the testimonial evidence is actually presented against him during the trial or hearing. However, depositions may be used without the deponent being actually called to the witness stand by the proponent, under certain conditions and for certain limited purposes. These exceptional situations are governed by Section 4, Rule 24 of the Rules of Court.

Sec. 4. Use of depositions. At the trial or upon the hearing of a motion of an interlocutory proceeding, any part or all of a deposition, so far as admissible under the rules of evidence, may be used against any party who was present or represented at the taking of the deposition or who had due notice thereof, in accordance with any of the following provisions: (a) Any deposition may be used by any party for the purpose of contradicting or impeaching the testimony of deponent as a witness; (b) The deposition of a party or of any one who at the time of taking the deposition was an officer, director, or managing agent of a public or private corporation, partnership, or association which is a party may be used by an adverse party for any purpose; (c) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds: (1) that the witness is dead; or (2) that the witness if out of the province and at a greater distance than fifty (50) kilometers from the place of trial or hearing, or is out of the Philippines, unless it appears that his absence was procured by the party offering the deposition; or (3) that the witness is unable to attend to testify because of age, sickness, infirmity, or imprisonment; or (4) that the party offering the deposition has been unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open court, to allow the deposition to be used; (d) If only part of a deposition is offered in evidence by a party, the adverse party may require him to introduce all of it which is relevant to the part introduced, and any party may introduce any other parts. The principle conceding admissibility to a deposition when the deponent is dead, out of the Philippines, or otherwise unable to come to court to testify, is consistent with another rule of evidence, found in Section 47, Rule 132 of the Rules of Court. Sec. 47. Testimony or deposition at a former proceeding. The testimony or deposition of a witness deceased or unable to testify, given in a former case or proceeding, judicial or administrative, involving the same parties and subject matter, may be given in evidence against the adverse party who had the opportunity to cross-examine him. It is apparent then that the deposition of any person may be taken wherever he may be, in the Philippines or abroad. If the party or witness is in the Philippines, his deposition "shall be taken before any judge, municipal or notary public" (Sec. 10, Rule 24, Rules of Court). If in a foreign state or country, the deposition "shall be taken: (a) on notice before a secretary or embassy or legation, consul general, consul, vice-consul, or consular agent of the Republic of the Philippines, or (b) before such person or officer as may be appointed by commission or under letters rogatory" (Sec. 11, Rule 24). Leave of court is not necessary where the deposition is to be taken before "a secretary or embassy or legation, consul general, consul, vice-consul, or consular agent of the Republic of the Philippines," and the defendant's answer has already been served (Sec. 1 Rule 24). After answer, whether the deposition-taking is to be accomplished within the Philippines or outside, the law does not authorize or contemplate any intervention by the court in the process, all that is required being that "reasonable notice" be given "in writing to every other party to the action . . . (stating) the time and place for taking the deposition and the name and address of each person to be examined, if known, and if the name is not known, a general description sufficient to identify him or the particular class or group to which he belongs. . . . " (Sec. 15, Rule 24). The court intervenes in the process only if a party moves (1) to "enlarge or shorten the time" stated in the notice (id.), or (2) "upon notice and for good cause shown," to prevent the deposition-taking, or impose conditions therefor, e.g., that "certain matters shall not be inquired into" or that the taking be "held with no one present except the parties to the action and their officers or counsel," etc. (Sec. 16, Rule 24), or (3) to terminate the process on motion and upon a showing that "it is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party" (Sec 18, Rule 24). Where the deposition is to be taken in a foreign country where the Philippines has no "secretary or embassy or legation, consul general, consul, viceconsul, or consular agent," then obviously it may be taken only "before such person or officer as may be appointed by commission or under letters rogatory. Section 12, Rule 24 provides as follows: Sec. 12. Commission or letters rogatory. A commission or letters rogatory shall be issued only when necessary or convenient, on application and notice, and on such terms and with such directions as are just and appropriate. Officers may be designated in notices or commissions either by name or descriptive title and letters rogatory may be addressed "To the Appropriate Judicial Authority in (here name the country)." A commission may be defined as "(a)n instrument issued by a court of justice, or other competent tribunal, to authorize a person to take depositions, or do any other act by authority of such court or tribunal" (Feria, J., Civil Procedure, 1969 ed., p. 415, citing Cyclopedic Law Dictionary, p. 200). Letters rogatory, on the other hand, may be defined as "(a)n instrument sent in the name and by the authority of a judge or court to another, requesting the latter to cause to be examined, upon interrogatories filed in a cause pending before the former, a witness who is within the jurisdiction of the judge or court to whom such letters are addressed" (Feria, J., op. cit., citing Cyclopedic Law Dictionary, p. 653). Section 12, Rule 24 just quoted states that a commission is addressed to "officers . . . designated . . . either by name or descriptive title," while letters rogatory are addressed to some "appropriate judicial authority in the foreign state." Noteworthy in this connection is the indication in the Rules that letters rogatory may be applied for and issued only after a commission has been "returned unexecuted" as is apparent from Form 21 of the "Judicial Standard Forms" appended to the Rules of Court, which requires the inclusion in a "petition for letters rogatory" of the following paragraph, viz.: xxx xxx xxx 3. A commission issued by this Court on the ______ day of ______, 19__, to take the testimony of (here name the witness or witnesses) in (here name the foreign country in which the testimony is to be taken), before _________________ (name of officer),

was returned unexecuted by __________________ on the ground that ____________, all of which more fully appears from the certificate of said __________ to said commission and made a part hereof by attaching it hereto (or state other facts to show commission is inadequate or cannot be executed) (emphasis supplied). In the case at bar, the Regional Trial Court has issued a commission to the "Asian Exchange Center, Inc. thru Director Joaquin R. Roces" "to take the testimonies of . . . Kenneth H. Lee and Yeong Fah Yeh, by deposition (upon written interrogatories) . . . ." It appears that said Center may, "upon request and authority of the Ministry (now Department) of Foreign Affairs, Republic of the Philippines" issue a "Certificate of Authentications" attesting to the identity and authority of Notaries Public and other public officers of the Republic of China, Taiwan (eg., the Section Chief, Department of Consular Affairs of the latter's Ministry of Foreign Affairs) (Annex B of Annex N of the petition for review on certiorari) a prima facie showing not rebutted by petitioner. It further appears that the commission is to be coursed through the Department of Foreign Affairs conformably with Circular No. 4 issued by Chief Justice Claudio Teehankee on April 6, 1987, pursuant to the suggestion of the Department of Foreign Affairs directing "ALL JUDGES OF THE REGIONAL TRIAL COURTS, METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT TRIAL COURTS" "to course all requests for the taking of deposition of witnesses residing abroad through the Department of Foreign Affairs" to enable it and "the Philippine Foreign Service establishments to act on the matter in a judicious and expeditious manner;" this, "in the interest of justice," and to avoid delay in the deposition-taking. Petitioner would however prevent the carrying out of the commission on various grounds. The first is that the deposition-taking will take place in "a foreign jurisdiction not recognized by the Philippines in view of its 'one-China policy.'" This is inconsequential. What matters is that the deposition is taken before a Philippine official acting by authority of the Philippine Department of Foreign Affairs and in virtue of a commission duly issued by the Philippine Court in which the action is pending, and in accordance, moreover, with the provisions of the Philippine Rules of Court pursuant to which opportunity for cross-examination of the deponent will be fully accorded to the adverse party. Dasmarias also contends that the "taking of deposition is a mode of pretrial discovery to be availed of before the action comes to trial." Not so. Depositions may be taken at any time after the institution of any action, whenever necessary or convenient. There is no rule that limits depositiontaking only to the period of pre-trial or before it; no prohibition against the taking of depositions after pre-trial. Indeed, the law authorizes the taking of depositions of witnesses before or after an appeal is taken from the judgment of a Regional Trial Court "to perpetuate their testimony for use in the event of further proceedings in the said court" (Rule 134, Rules of Court), and even during the process of execution of a final and executory judgment (East Asiatic Co. v. C.I.R., 40 SCRA 521, 544). Dasmarias further claims that the taking of deposition under the circumstances is a "departure from the accepted and usual judicial proceedings of examining witnesses in open court where the demeanor could be observed by the trial judge;" that it is "inherently unfair" to allow APL, "a foreign entity suing in the Philippines, to present its evidence by mere deposition of its witnesses away from the 'penetrating scrutiny' of the trial Judge while petitioner is obligated to bring and present its witnesses in open court subject to the prying eyes and probing questions of the Judge." Of course the deposition-taking in the case at bar is a "departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge;" but the procedure is not on that account rendered illegal nor is the deposition thereby taken, inadmissible. It precisely falls within one of the exceptions where the law permits such a situation, i.e., the use of deposition in lieu of the actual appearance and testimony of the deponent in open court and without being "subject to the prying eyes and probing questions of the Judge." This is allowed provided the deposition is taken in accordance with the applicable provisions of the Rules of Court and the existence of any of the exceptions for its admissibility e.g., "that the witness if out of the province and at a greater distance than fifty (50) kilometers from the place of trial or hearing, or is out of the Philippines, unless it appears that his absence was procured by the party offering the deposition; or . . . that the witness is unable to attend to testify because of age, sickness, infirmity, or imprisonment, etc." (Sec. 4 Rule 24, supra, emphasis supplied) is first satisfactorily established (See Lopez v. Maceren, 95 Phil. 754). The Regional Trial Court saw fit to permit the taking of the depositions of the witnesses in question only by written interrogatories, removing the proponent's option to take them by oral examination, i.e., by going to Taipei and actually questioning the witnesses verbally with the questions and answers and observations of the parties being recorded stenographically. The imposition of such a limitation, and the determination of the cause thereof, are to be sure within the Court's discretion. The ostensible reason given by the Trial Court for the condition that the deposition be taken "only upon written interrogatories" is "so as to give defendant (Dasmarias) the opportunity to cross-examine the witnesses by serving crossinterrogatories." The statement implies that opportunity to cross-examine will not be accorded the defendant if the depositions were to be taken upon oral examination, which, of course, is not true. For even if the depositions were to be taken on oral examination in Taipei, the adverse party is still accorded full right to cross-examine the deponents by the law, either by proceeding to Taipei and there conducting the cross-examination orally, or opting to conduct said cross-examination merely by serving cross-interrogatories. One other word. In its Order of July 5, 1991 denying Dasmarias motion for reconsideration of the earlier order dated March 15, 1991 (allowing the taking of deposition by commission) one of the reasons adduced by the Regional Trial Court for the denial was that the motion had been "filed out of time." Evidently, the Trial Court reached this conclusion because, as the record discloses, the motion for reconsideration was filed by Dasmarias on June 25, 1991, twenty-five (25) days after notice (on May 20, 1991) of the Order of March 15, 1991 sought to be reconsidered. Denial of the motion on such a ground is incorrect. In the first place, it appears that there was a motion for extension of time to file a motion for reconsideration, ending on June 25, 1991 which was however not acted on or granted by the Court. More importantly, the order sought to be reconsidered is aninterlocutory order, in respect of which there is no provision of law fixing the time within which reconsideration thereof should be sought. PREMISES CONSIDERED, the Court Resolved to DISMISS the petition for review on certiorari. Costs against petitioner. SO ORDERED. Padilla, Regalado, Nocon and Puno, JJ., concur.

Republic of the Philippines SUPREME COURT SECOND DIVISION G.R. No. 153667. August 11, 2005 AYALA LAND, INC., Petitioners, vs. HON. LUCENITO N. TAGLE, in his capacity as Presiding Judge, RTC-Imus, Branch 20, ASB REALTY CORP., and E. M. RAMOS & SONS, INC., Respondent. DECISION CHICO-NAZARIO, J.: Civil Case No. 931-94 for nullification of Contract to Sell Real Properties, Cancellation of Annotations on Transfer Certificates of Title and Damages was filed before the Regional Trial Court of Imus, Cavite City, by ASB Realty Corporation (ASB) and E. M. Ramos and Sons, Inc. (EMRASON) against Ayala Land, Inc. (ALI), Emerito B. Ramos, Jr., et al.1 In its complaint, ASB alleged that on 21 May 1994, EMRASON, a real estate company which owns real estate properties in Dasmarias, Cavite City, with a total area of 372 hectares, whose chairman and president is Emerito M. Ramos, Sr., with his wife, Susana B. Ramos, and children as stockholders, entered into a Letter-Agreement with ASB for the conditional sale of sixty-five percent (65%) of the said land for a consideration ofP400,000,000.00 payable in five installments. However, ASB, through its president, Mr. Luke C. Roxas, received a letter from the children of Emerito Ramos, Sr., informing him that on 18 May 1994, they entered into a Contract to Sell said real estate properties with ALI.2 ASB confirmed the contract of the Ramos children with ALI when it found out that the same was annotated on the Transfer Certificates of Title of the real estate properties in dispute. This prompted ASB to file the Complaint dated 13 June 1994 before the trial court.3 ALI, thereafter, filed its Answer with Compulsory Counterclaim and Cross-claim.4 Plaintiff ASB subsequently filed a Motion5 for Leave to take testimony by deposition upon oral examination of Emerito Ramos, Sr., citing Section 4(c), Rule 24 of the Revised Rules of Court stating that Emerito Ramos, Sr. was already 87 years old and although he was of sound mind there is always the possibility that he may not be able to testify on plaintiffs behalf in the course of the trial on the merits. In the Omnibus Order6 of the trial court dated 17 October 1994, plaintiffs motion was granted. ASB then obtained the deposition upon oral examination of Emerito Ramos, Sr. on six different occasions, to wit: 22 and 24 November 1994, 5, 8 and 16 December 1994, and 26 January 1995. Upon termination of Emerito Ramos, Sr.s direct testimony by deposition, both plaintiffs and defendants agreed that the cross-examination be scheduled on 02, 10 and 15 February 1995.7These dates were reset to 15 February 1995. However, on 30 January 1995, ALI filed a "Motion8 to Resolve Objections (In deposition proceedings with Omnibus Motion)" on the propriety, admissibility and conformity of the deposition proceedings to the Rules. Specifically, ALI sought rulings on its objections to leading questions, violations of the best-evidence rule, rule on presentation of secondary evidence, incompetence of the deponent, opinion rule, manner of presentation of evidence, and testimonies not forming part of the offer.9 As a consequence, the trial court, in an Order dated 14 February 1995, cancelled the cross-examination of Emerito Ramos, Sr.s deposition scheduled on 15 February 1995. On 05 May 1995,10 the trial court ruled on the objections of ALI sustaining some of its objections, overruling the others and upholding the propriety of the presentation of evidence made by plaintiff through deposition. In the same Order, the trial court directed the setting of the cross-examination of the deponent. ALI filed a Motion for Reconsideration of the Order setting the hearing of the case for cross-examination, which the trial court denied on 07 September 1995.11 The trial court again directed that the cross-examination of Emerito Ramos, Sr., be scheduled. The same was thus set on 06 October 1995. Before this date, however, ALI filed a Manifestation and Motion dated 02 October 1995 praying that the date set be cancelled and re-scheduled to another date.12 The trial court reset the hearing on 27 October 1995. Thereafter, ALI filed before the Court of Appeals a Petition for Certiorari and Prohibition with urgent application for Temporary Restraining Order and Writ of Preliminary Injunction13 to restrain the public respondent, Judge Lucenito Tagle, from implementing the Order dated 07 September 1995 and to declare null and void and expunging the entire deposition proceedings taken in connection with Civil Case No. 931-94.14 The Court of Appeals issued a Temporary Restraining Order dated 04 October 199515 and later on, a Writ of Preliminary Injunction dated 14 November 199516 pending resolution of the petition. On 29 October 1996, the Court of Appeals rendered its decision17 denying due course and dismissing the petition of ALI. The Court of Appeals held: In the instant case, Atty. Emerito Ramos, Sr. testified on matters of his personal knowledge, even if in the course of his testimony, he referred to certain documents in court, being the President and Chairman of EMRASON. In that capacity, he carried on negotiations relative to the sale of the Dasmarias property. Indeed, "all persons who can perceive, and perceiving, can make known their perception to others, may be witnesses" (Sec. 20, Rule 130, Rules of Court). Sec. 16, Rule 132, as contended by petitioner, is not applicable to the case at bench as Atty. Ramos was not refreshing his memory on a fact or transaction with the aid of memoranda. Rather, he was freely recollecting and testifying on matters within the ambit of his own personal competence, and merely referring to the letter that he received from Mr. Fernando Ayala, and another letter written by a Victor Manarang to his son, Emerito Ramos, Jr., both letters being now in his possession by reason of his duties as President and Chairman of EMRASON. (TSN, 05 December 1994, pp. 70-85)18

ALIs Motion for Reconsideration was likewise denied by the Court of Appeals. On 10 June 1999, Emerito Ramos, Sr. died at the age of 92 years old. Plaintiff then filed before the trial court a motion to introduce in evidence the deposition of Emerito Ramos, Sr.19 The motion was opposed by ALI.20 ASB filed its Reply.21 ALI thereafter filed its Rejoinder22 and ASB its Surrejoinder.23 On 28 September 1999, the trial court issued its Order setting aside the opposition of ALI and admitting in evidence the deposition of Emerito Ramos, Sr.24 Motion for Reconsideration filed by ALI was denied in an Order dated 24 December 1999. 25 ALI again elevated the case to the Court of Appeals by way of Petition for Review on Certiorari26 under Rule 65 of the Rules of Court. In a decision27 dated 31 January 2002, the Court of Appeals dismissed the petition for lack of merit. ALI filed a Motion for Reconsideration28 which was opposed29 by private respondents ASB and EMRASON. The motion was denied in a resolution dated 23 May 2002.30 Hence this Petition. The issues raised in the instant petition are the following: I. WHETHER OR NOT THE ALLEGED DEPOSITION OF THE WITNESS EMERITO M. RAMOS, SR. IS ADMISSIBLE UNDER THE RULES. II. WHETHER OR NOT PETITIONER HAD WAIVED ITS RIGHT TO CROSS-EXAMINE THE DEPONENT, EMERITO M. RAMOS, SR. III. WHETHER OR NOT RESPONDENT APPELLATE COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SUSTAINED THE RULING OF THE LOWER COURT IN FINDING THE DEPOSITION OF WITNESS EMERITO M. RAMOS, SR. AS ADMISSIBLE IN EVIDENCE.31 The first issue is not novel. The same has been in fact passed upon twice by the Court of Appeals. As defined, the term "deposition" is sometimes used in a broad sense to describe any written statement verified by oath. In its more technical and appropriate sense, the meaning of the word is limited to written testimony of a witness given in the course of a judicial proceeding in advance of the trial or hearing upon oral examination. A deposition is the testimony of a witness, put or taken in writing, under oath or affirmation, before a commissioner, examiner or other judicial officer, in answer to interlocutory and cross-interlocutory, and usually subscribed by the witnesses.32 [A]nd the purposes of taking depositions are to: 1) Give greater assistance to the parties in ascertaining the truth and in checking and preventing perjury; 2) Provide an effective means of detecting and exposing false, fraudulent claims and defenses; 3) Make available in a simple, convenient and inexpensive way, facts which otherwise could not be proved except with great difficulty; 4) Educate the parties in advance of trial as to the real value of their claims and defenses thereby encouraging settlements; 5) Expedite litigation; 6) Safeguard against surprise; 7) Prevent delay; 8) Simplify and narrow the issues; and 9) Expedite and facilitate both preparation and trial.33 In the case of Jonathan Landoil International Co., Inc. v. Mangudadatu, this Court instructs:34 . . . Deposition is chiefly a mode of discovery, the primary function of which is to supplement the pleadings for the purpose of disclosing the real points of dispute between the parties and affording an adequate factual basis during the preparation for trial. The liberty of a party to avail itself of this procedure, as an attribute of discovery, is "well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law." Depositions maybe taken at anytime after the institution of any action, whenever necessary or convenient.35 In this case, the trial court permitted the taking of Emerito Ramos, Sr.s deposition chiefly because of his advance age which ground is considered valid and justified under the Rules of Court.36 ALI contends that the prerequisites of a valid deposition were disregarded. It repeatedly insists that what transpired from 22 November 1994 to 26 January 1995 was simply a recordation of testimony of Emerito Ramos, Sr. intended to form part of a deposition for submission to the trial court but not a deposition itself considering that it never underwent the process of a valid deposition taken under Rules 23 and 132 of the Rules of Court, as the deposition was not completed, signed, certified, filed or offered before the court a quo, hence, under the Rules, considered incompetent evidence.37 It must be noted that the depositions of Emerito Ramos, Sr., taken on the dates earlier mentioned, were substantially made in accordance with the requirements of the Rules. In fact, in its Petition before the Court of Appeals, ALI confirmed the taking of deposition on said dates and that it was duly represented by its counsel during the proceedings. As to whether the manner by which the deposition was taken faithfully complied with the requirements under the Rules of Court, it is not disputed that the deposition was taken inside the courtroom of the trial court, before the clerk of court. A stenographer was present, tape recorders and a video camera were even utilized to record the proceedings, in the presence of all the opposing counsels of record including ALIs.38The following factual findings remain uncontroverted: To reiterate, the deposition of the late Emerito Ramos, Sr. was taken inside the courtroom by the Clerk of Court in the presence of the parties and their lawyers, and the entire proceedings was transcribed by the stenographers of the Court. Thus, the requirements that the deposition has to be sealed, examined and signed by the deponent, and also certified, sealed and signed by the deposition officer would be, to the mind of the court, already superfluous. Strict compliance with the formal requirements of Rule 23 would hold true in cases of depositions taken outside the Court. As intimated

earlier, the rules on discovery should not be unduly restricted; otherwise, the perceived advantage of a liberal discovery procedure in ascertaining the truth and expediting the disposal of litigation would be defeated. Be that as it may, the motion for reconsideration filed by defendant Ayala Land, Inc. is DENIED.39 On the objection of ALI owing to the lack of signature of the deponent, it should be noted that a deposition not signed does not preclude its use during the trial. A deponents signature to the deposition is not in all events indispensable since the presence of signature goes primarily to the form of deposition. The requirement that the deposition must be examined and signed by the witness is only to ensure that the deponent is afforded the opportunity to correct any errors contained therein and to ensure its accuracy.40 In any event, the admissibility of the deposition does not preclude the determination of its probative value at the appropriate time. The admissibility of evidence should not be equated with weight of evidence. The admissibility of evidence depends on its relevance and competence while the weight of evidence pertains to evidence already admitted and its tendency to convince and persuade.41 This Court has observed that the trial court has painstakingly gone over every objection of ALI contained in its Motion dated 30 January 1995 and ruled on every single objection in the Order dated 05 May 1995 and these objections were again taken up in the Order of the trial court dated 07 September 1995. On this point, we find no compelling reason to disturb the conclusions arrived at by the trial court. It has been repeatedly held that the deposition discovery rules are to be accorded a broad and liberal treatment and the liberty of a party to make discovery is well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law,42 as in the case at bar. The second and third issues raised by ALI are that it was denied an opportunity to cross-examine the deponent consequently resulting in its denial of due process. The records reveal that ALI was given more than enough opportunity to cross-examine the deponent and its failure to exercise such right is solely attributable to its own inaction. At this instance, ALI cannot feign prejudice and denial of due process. As echoed in several cases,43due process is, in essence, simply an opportunity to be heard. The right to cross-examine is not an absolute one which a party can demand at all times. The right is a personal one which may be waived by conduct amounting to a renunciation of the right of cross-examination, thus, where a party has had the opportunity to cross-examine a witness but failed to avail himself of it, he necessarily forfeits the right to cross-examine.44 As rightly observed by the Court of Appeals: Applying the foregoing precept in the light of the facts obtaining in the instant case, We are not inclined to indulge the PETITIONER in its argument that it was deprived of its constitutional right to due process. Verily, as may be readily gleaned from the records, the PETITIONER was afforded several opportunities to cross-examine the deponent ATTY. RAMOS. However, despite its knowledge of deponents old age and frail health, PETITIONER chose to squander its right to subject under appropriate test the assertions raised by the witness in his deposition. It is worth noting that the PETITIONER, following the termination of the direct examination of the deceased ATTY. RAMOS, requested for a setting of the cross-examination. During the supposed date of cross-examination, however, instead of seizing the chance to exercise the right which they now all too belatedly invoke, PETITIONER moved for the postponement of the proceedings. After this Court ruled on its Motion to Resolve objections, the PETITIONER again moved for several times for the resetting of the cross-examination to future dates.45 WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The Decision of the Court of Appeals dated 31 January 2002 and its Resolution dated 23 May 2002 are AFFIRMED. Costs against petitioner. SO ORDERED. Puno, (Chairman), Callejo, Sr., and Tinga, JJ., concur. Austria-Martinez, J., no part.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 147143 March 10, 2006

HYATT INDUSTRIAL MANUFACTURING CORP., and YU HE CHING, Petitioners, vs. LEY CONSTRUCTION AND DEVELOPMENT CORP., and PRINCETON DEVELOPMENT CORP.,Respondents. DECISION AUSTRIA-MARTINEZ, J.: Before the Court is a petition for review on certiorari seeking the nullification of the Decision dated May 4, 2000 of the Court of Appeals (CA) then Seventh Division in CA-G.R. CV No. 57119, which remanded Civil Case No. 94-1429 to the trial court and directed the latter to allow the depositiontaking without delay;1 and the CA Resolution dated February 13, 2001 which denied petitioners motion for reconsideration.2 The facts are as follows: On April 8, 1994, respondent Ley Construction and Development Corporation (LCDC) filed a complaint for specific performance and damages with the Regional Trial Court of Makati, Branch 62 (RTC), docketed as Civil Case No. 94-1429, against petitioner Hyatt Industrial Manufacturing Corporation (Hyatt) claiming that Hyatt reneged in its obligation to transfer 40% of the pro indiviso share of a real property in Makati in favor of LCDC despite LCDCs full payment of the purchase price of P2,634,000.00; and that Hyatt failed to develop the said property in a joint venture, despite LCDCs payment of 40% of the pre-construction cost.3 On April 12, 1994, LCDC filed an amended complaint impleading Princeton Development Corporation (Princeton) as additional defendant claiming that Hyatt sold the subject property to Princeton on March 30, 1994 in fraud of LCDC.4 On September 21, 1994, LCDC filed a second amended complaint adding as defendant, Yu He Ching (Yu), President of Hyatt, alleging that LCDC paid the purchase price of P2,634,000.00 to Hyatt through Yu.5 Responsive pleadings were filed and LCDC filed notices to take the depositions of Yu; Pacita Tan Go, Account Officer of Rizal Commercial Banking Corporation (RCBC); and Elena Sy, Finance Officer of Hyatt. Hyatt also filed notice to take deposition of Manuel Ley, President of LCDC, while Princeton filed notice to take the depositions of Manuel and Janet Ley.6 On July 17, 1996, the RTC ordered the deposition-taking to proceed.7 At the scheduled deposition of Elena Sy on September 17, 1996, Hyatt and Yu prayed that all settings for depositions be disregarded and pre-trial be set instead, contending that the taking of depositions only delay the resolution of the case. The RTC agreed and on the same day ordered all depositions cancelled and pre-trial to take place on November 14, 1996.8 LCDC moved for reconsideration9 which the RTC denied in its October 14, 1996 Order, portion of which reads: This Court has to deny the motion, because: 1) as already pointed out by this Court in the questioned Order said depositions will only delay the early termination of this case; 2) had this Court set this case for pre-trial conference and trial thereafter, this case would have been terminated by this time; 3) after all, what the parties would like to elicit from their deponents would probably be elicited at the pre-trial conference; 4) no substantial rights of the parties would be prejudiced, if pre-trial conference is held, instead of deposition.10 On November 14, 1996, the scheduled date of the pre-trial, LCDC filed an Urgent Motion to Suspend Proceedings Due to Pendency of Petition for Certiorari in the Court of Appeals.11 The petition, which sought to annul the Orders of the RTC dated September 17, 1996 and October 14, 1996, was docketed as CA-G.R. SP No. 4251212 and assigned to the then Twelfth Division of the CA. Meanwhile, pre-trial proceeded at the RTC as scheduled13 and with the refusal of LCDC to enter into pre-trial, Hyatt, Yu and Princeton moved to declare LCDC non-suited which the RTC granted in its Order dated December 3, 1996, thus: On September 17, 1996, this Court noticing that this case was filed as early (as) April 4, 199414 and has not reached the pre-trial stage because of several depositions applied for by the parties, not to mention that the records of this case has reached two (2) volumes, to avoid delay, upon motion, ordered the cancellation of the depositions. On September 24, 1996, plaintiff filed a motion for reconsideration, seeking to reconsider and set aside the order dated September 17, 1996, which motion for reconsideration was denied in an order dated October 14, 1996, ruling among others that "after all, what the parties would like to elicit from these deponents would probably be elicited at the pre-trial conference", and, reiterated the order setting this case for pre-trial conference on November 14, 1996. On the scheduled pre-trial conference on November 14, 1996, a petition for certiorari was filed with the Court of Appeals, seeking to annul the Order of this Court dated September 17, 1996 and October 14, 1996, furnishing this Court with a copy on the same date.

At the scheduled pre-trial conference on November 14, 1996, plaintiff orally moved the Court to suspend pre-trial conference alleging pendency of a petition with the Court of Appeals and made it plain that it cannot proceed with the pre-trial because the issue on whether or not plaintiff may apply for depositions before the pre-trial conference is a prejudicial question. Defendants objected, alleging that even if the petition is granted, pre-trial should proceed and that plaintiff could take deposition after the pre-trial conference, insisting that defendants are ready to enter into a pre-trial conference. This Court denied plaintiffs motion to suspend proceedings and ordered plaintiff to enter into pre-trial conference. Plaintiff refused. Before this Court denied plaintiffs motion to suspend, this Court gave Plaintiff two (2) options: enter into a pre-trial conference, advising plaintiff that what it would like to obtain at the deposition may be obtained at the pre-trial conference, thus expediting early termination of this case; and, terminate the pre-trial conference and apply for deposition later on. Plaintiff insisted on suspension of the pre-trial conference alleging that it is not ready to enter into pre-trial conference in view of the petition for certiorari with the Court of Appeals. Defendants insisted that pre-trial conference proceed as scheduled, manifesting their readiness to enter into a pre-trial conference. When plaintiff made it clear that it is not entering into the pre-trial conference, defendants prayed that plaintiff be declared non-suited. x x x xxxx In the light of the foregoing circumstances, this Court is compelled to dismiss plaintiffs complaint. WHEREFORE, for failure of plaintiff to enter into pre-trial conference without any valid reason, plaintiffs complaint is dismissed. Defendants counterclaims are likewise dismissed. SO ORDERED.15 LCDC filed a motion for reconsideration16 which was denied however by the trial court in its Order dated April 21, 1997.17 LCDC went to the CA on appeal which was docketed as CA-G.R. CV No. 57119 and assigned to the then Seventh Division of the CA.18 On July 24, 1997, the CAs then Twelfth Division,19 in CA-G.R. SP No. 42512 denied LCDCs petition forcertiorari declaring that the granting of the petition and setting aside of the September 17, 1996 and October 14, 1996 Orders are manifestly pointless considering that the complaint itself had already been dismissed and subject of the appeal docketed as CA-G.R. CV No. 57119; that the reversal of the said Orders would have practical effect only if the dismissal were also set aside and the complaint reinstated; and that the dismissal of the complaint rendered the petition for certiorari devoid of any practical value.20 LCDCs motion for reconsideration of the CA-G.R. SP No. 42512 decision was denied on March 4, 1998.21 LCDC then filed with this Court, a petition for certiorari, docketed as G.R. No. 133145 which this Court dismissed on August 29, 2000.22 On May 4, 2000, the CAs then Seventh Division issued in CA-G.R. CV No. 57119 the herein assailed decision, the fallo of which reads: WHEREFORE, premises considered, finding the appeal meritorious, this case is remanded to the court a quofor further hearing and directing the latter to allow the deposition taking without delay. SO ORDERED.23 The CA reasoned that: LCDC complied with Section 1, Rule 23 of the 1997 Rules of Civil Procedure which expressly sanctions depositions as a mode of discovery without leave of court after the answer has been served; to unduly restrict the modes of discovery during trial would defeat the very purpose for which it is intended which is a pre-trial device, and at the time of the trial, the issues would already be confined to matters defined during pre-trial; the alleged intention of expediting the resolution of the case is not sufficient justification to recall the order to take deposition as records show that the delay was brought about by postponement interposed by both parties and other legal antecedents that are in no way imputable to LCDC alone; deposition-taking, together with the other modes of discovery are devised by the rules as a means to attain the objective of having all the facts presented to the court; the trial court also erred in dismissing the complaint as LCDC appeared during the pre-trial conference and notified it of the filing of a petition before the CA; such is a legitimate justification to stall the pre-trial conference, as the filing of the petition was made in good faith in their belief that the court a quo erred in canceling the deposition scheduled for no apparent purpose.24 Hyatt and Princeton filed their respective motions for reconsideration which the CA denied on February 13, 2001.25 Hyatt and Yu now come before the Court via a petition for review on certiorari, on the following grounds: I THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE ABUSE OF DISCRETION, ACTUALLY AMOUNTING TO LACK OF JURISDICTION, IN HOLDING IN EFFECT INVALID THE ORDERS OF THE LOWER COURT DATED SEPTEMBER 17, 1996 AND OCTOBER 14, 1996 WHICH ARE NOT RAISED OR PENDING BEFORE IT, BUT IN ANOTHER CASE (CA-G.R. SP. No. 42512) PENDING BEFORE ANOTHER DIVISION OF THE COURT OF APPEALS, TWELFTH DIVISION, AND WHICH CASE WAS DISMISSED BY THE SAID DIVISION OF THE COURT OF APPEALS AND FINALLY BY THE HONORABLE SUPREME COURT IN G.R. NO. 133145. II

THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE ABUSE OF DISCRETION AND SERIOUS ERRORS OF LAW IN REVERSING THE LOWER COURTS ORDER DATED DECEMBER 3, 1996 AND APRIL 21, 1997 HOLDING RESPONDENT NON -SUITED FOR FAILURE TO ENTER INTO PRETRIAL.26 Anent the first issue, petitioners claim that: the validity of the RTC Order dated September 17, 1996 which set the case for pre-trial, as well as its Order dated October 14, 1996 denying LCDCs motion for partial reconsideration are not involved in CA-G.R. CV No. 57119 but were the subject of CA-G.R. SP No. 42512, assigned to the then Twelfth Division, which dismissed the same on July 24, 1997 and which dismissal was affirmed by this Court in G.R. No. 133145; in passing upon the validity of the Orders dated September 17, 1996 and October 14, 1996, the CAs then Seventh Division in CA -G.R. CV No. 57119 exceeded its authority and encroached on issues taken cognizance of by another Division.27 On the second issue, petitioners claim that: the CAs then Seventh Division should have outrightly dismissed the appeal of LCDC as the same did not involve any error of fact or law but pertains to a matter of discretion which is properly a subject of certiorari under Rule 65 of the Revised Rules of Court; conducting discovery thru deposition is not a condition sine qua non to the holding of a pre-trial and the fact that LCDC wanted to take the deposition of certain persons is not a valid ground to suspend the holding of pre-trial and subsequently the trial on the merits; the persons whose depositions were to be taken were listed as witnesses during the trial; to take their depositions before the lower court and to present them as witnesses during the trial on the merits would result in unnecessary duplicity; the fact that LCDC has a pending petition for certiorari with the CAs then Twelfth Division docketed as CA-G.R. SP No. 42512 is not a ground to cancel or suspend the scheduled pre-trial on November 14, 1996 as there was no restraining order issued; LCDCs availment of the discovery procedure is causing the undue delay of the case; it is only after LCDC has filed its complaint that it started looking for evidence to support its allegations thru modes of discovery and more than two years has already passed after the filing of the complaint yet LCDC still has no documentary evidence to present before the lower court to prove its allegations in the complaint.28 Petitioners then pray that the Decision dated May 4, 2000 and the Resolution dated February 13, 2001 of the CAs then Seventh Division in CA-G.R. CV No. 57119 be annulled and set aside and the validity of the Orders dated December 3, 1996 and April 21, 1997 of the RTC of Makati, Branch 62 in Civil Case No. 94-1429 be sustained.29 In its Comment, LCDC argues that the petitioners erred in claiming that the CAs then Seventh Division overstepped its authority as this Court has ruled in G.R. No. 133145 that the issue of whether LCDC has been denied its right to discovery is more appropriately addressed in the appeal before the then Seventh Division in CA-G.R. CV No. 57119 below rather than by the then Twelfth Division in the certiorari proceeding in CA-G.R. SP No. 42512; and while the appeal of the final Order of the RTC dated December 3, 1996 also questioned the Orders dated September 17, 1996 and October 14, 1996, it does not render the appeal improper as this Court in G.R. No. 133145 held that the subsequent appeal constitutes an appropriate remedy because it assails not only the Order dated December 3, 1996, but also the two earlier orders.30 On the second issue, LCDC contends that: the mere fact that a deponent will be called to the witness stand during trial is not a ground to deny LCDC the right to discovery and does not cause "unnecessary duplicity", otherwise no deposition can ever be taken; a deposition is for the purpose of "discovering" evidence while trial is for the purpose of "presenting" evidence to the court; if petitioners concern was the delay in the disposition of the case, the remedy is to expedite the taking of the depositions, not terminate them altogether; petitioners have nothing to fear from discovery unless they have in their possession damaging evidence; the parties should be allowed to utilize the discovery process prior to conducting pre-trial since every bit of relevant information unearthed through the discovery process will hasten settlement, simplify the issues and determine the necessity of amending the pleadings; the trial court erred in not suspending the pre-trial conference pending the petition forcertiorari before the then Twelfth Division of the CA since considerations of orderly administration of justice demanded that the trial court accord due deference to the CA; not only was LCDCs petition for certiorari filed in good faith, the CA found it meritorious, vindicating LCDCs insistence that the pre-trial be suspended; the undue delay in the disposition of the case was not attributable to LCDCs deposition-taking but to the flurry of pleadings filed by defendants below to block LCDCs depositions and prevent it from gaining access to critical evidence; the critical evidence that LCDC needs to obtain through discovery is evidence that is totally within the knowledge and possession of petitioners and defendant Princeton and is not available elsewhere.31 On September 17, 2001, the Court required the parties to file their respective memoranda.32 Hyatt and Yu on the one hand and LCDC on the other filed their respective memoranda reiterating their positions.33 On January 2, 2002, Princeton filed a "Comment" which this Court considered as its Memorandum in the Resolution dated January 30, 2002.34 In said memorandum, Princeton averred that: it is not true that Princeton failed to comply with any discovery orders as all information requested of Princeton was duly furnished LCDC and there are no pending discovery orders insofar as Princeton is concerned; LCDC is seeking to dictate its procedural strategies on the RTC and the opposing parties; LCDC was not deprived due process as it was given all the opportunity to prepare for its case and to face its opponents before the court; LCDC admits to the probability of forum shopping as it filed a petition for certiorari with the then Twelfth Division of the CA and later an appeal with the then Seventh Division of the CA; the RTC did not bar LCDC from presenting witnesses or discovering any evidence, as all it did was to transfer the venue of the testimony and discovery to the courtroom and get on with the case which LCDC did not want to do; that discovery proceedings need not take place before pre-trial conference; trial court judges are given discretion over the right of parties in the taking of depositions and may deny the same for good reasons in order to prevent abuse; the trial court did not err in not granting LCDCs motion to suspend proceedings due to the pendency of a petition for certiorari with the CA since there was no order from said court and there was no merit in the petition for certiorari as shown by the dismissal thereof by the then Twelfth Division; there was proper and legal ground for the trial court to declare LCDC non-suited; appearance at the pre-trial is not enough; there is no evidence to support LCDCs claim that Hyatt surreptitiously transferred title to Princeton.35 The Court is in a quandary why Hyatt and Yu included Princeton as respondent in the present petition when Princeton was their co-defendant below and the arguments they raised herein pertain only to LCDC. With the failure of petitioners to raise any ground against Princeton in any of its pleadings before this Court, we shall treat Princetons inclusion as respondent in the present petition as mere inadvertence on the part of petitioners. Now to the merits. The issues that need to be resolved in this case may be simplified as follows: (1) Whether the CAs then Seventh Division exceeded its authority in ruling upon the validity of the Orders dated September 17, 1996 and November 14, 1996; and (2) Whether the CA erred in remanding the case to the trial court and order the deposition-taking to proceed.

We answer both questions in the negative. Petitioners assert that the CAs then Twelfth Division in CA-GR SP No. 42512 and this Court in G.R. No. 133145 already ruled upon the validity of the Orders dated September 17, 1996 and November 14, 1996, thus the CAs then Seventh Division in CA G.R. CV No. 57119 erred in ruling upon the same. A cursory reading of the decisions in CA-GR SP No. 42512 and G.R. No. 133145, however, reveals otherwise. The CAs then Twelfth Division in CA-G.R. SP No. 42512 was explicit in stating thus: x x x Any decision of ours will not produce any practical legal effect. According to the petitioner, if we annul the questioned Orders, the dismissal of its Complaint by the trial [court] will have to be set aside in its pending appeal. That assumes that the division handling the appeal will agree with Our decision. On the other hand, it may not. Also other issues may be involved therein than the validity of the herein questioned orders. We cannot pre-empt the decision that might be rendered in such appeal. The division to [which] it has been assigned should be left free to resolve the same. On the other hand, it is better that this Court speak with one voice.36 This Court in G.R. No. 133145 also clearly stated that: x x x First, it should be stressed that the said Petition (CA-G.R. SP No. 42512) sought to set aside only the two interlocutory RTC Orders, not the December 3, 1996 Resolution dismissing the Complaint. Verily, the Petition could not have assailed the Resolution, which was issued after the filing of the former. Under the circumstances, granting the Petition for Certiorari and setting aside the two Orders are manifestly pointless, considering that the Complaint itself had already been dismissed. Indeed, the reversal of the assailed Orders would have practical effect only if the dismissal were also set aside and the Complaint reinstated. In other words, the dismissal of the Complaint rendered the Petition for Certiorari devoid of any practical value.

Second, the Petition for Certiorari was superseded by the filing, before the Court of Appeals, of a subsequent appeal docketed as CA-G.R. CV No. 57119, questioning the Resolution and the two Orders. In this light, there was no more reason for the CA to resolve the Petition for Certiorari.
xxxx In this case, the subsequent appeal constitutes an adequate remedy. In fact, it is the appropriate remedy, because it assails not only the Resolution but also the two Orders. xxxx WHEREFORE, the Petition is DENIED and the assailed Resolutions AFFIRMED. x x x.37 With the pronouncements of the CA in CA-G.R. SP No. 42512 and by this Court in G.R. No. 133145 that the subsequent appeal via CA-G.R. CV No. 57119 constitutes as the adequate remedy to resolve the validity of the RTC Orders dated September 17, 1996 and November 14, 1996, the arguments of petitioners on this point clearly have no leg to stand on and must therefore fail. On the second issue, the Court finds that the CA was correct in remanding the case to the RTC and ordering the deposition-taking to proceed. A deposition should be allowed, absent any showing that taking it would prejudice any party.38 It is accorded a broad and liberal treatment and the liberty of a party to make discovery is well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of law.39 It is allowed as a departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge, consistent with the principle of promoting just, speedy and inexpensive disposition of every action and proceeding;40 and provided it is taken in accordance with the provisions of the Rules of Court, i.e., with leave of court if summons have been served, and without such leave if an answer has been submitted; and provided further that a circumstance for its admissibility exists (Section 4, Rule 23, Rules of Court).41 The rules on discovery should not be unduly restricted, otherwise, the advantage of a liberal discovery procedure in ascertaining the truth and expediting the disposal of litigation would be defeated.42 Indeed, the importance of discovery procedures is well recognized by the Court. It approved A.M. No. 03-1-09-SC on July 13, 2004 which provided for the guidelines to be observed by trial court judges and clerks of court in the conduct of pre-trial and use of deposition-discovery measures. Under A.M. No. 03-1-09-SC, trial courts are directed to issue orders requiring parties to avail of interrogatories to parties under Rule 45 and request for admission of adverse party under Rule 26 or at their discretion make use of depositions under Rule 23 or other measures under Rule 27 and 28 within 5 days from the filing of the answer. The parties are likewise required to submit, at least 3 days before the pre-trial, pre-trial briefs, containing among others a manifestation of the parties of their having availed or their intention to avail themselves of discovery procedures or referral to commissioners.43 Since the pertinent incidents of the case took place prior to the effectivity of said issuance, however, the depositions sought by LCDC shall be evaluated based on the jurisprudence and rules then prevailing, particularly Sec. 1, Rule 23 of the 1997 Rules of Court which provides as follows: SECTION 1. Depositions pending action, when may be taken.--- By leave of court after jurisdiction has been obtained over any defendant or over property which is the subject of the action, or without such leave after an answer has been served, the testimony of any person, whether a party or not, may be taken, at the instance of any party, by deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by the use of a subpoena as provided in Rule 21. Depositions shall be taken only in accordance with

these Rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as the court prescribes. (Emphasis supplied). As correctly observed by the CA, LCDC complied with the above quoted provision as it made its notice to take depositions after the answers of the defendants have been served. LCDC having complied with the rules then prevailing, the trial court erred in canceling the previously scheduled depositions. While it is true that depositions may be disallowed by trial courts if the examination is conducted in bad faith; or in such a manner as to annoy, embarrass, or oppress the person who is the subject of the inquiry, or when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege,44 such circumstances, however are absent in the case at bar. The RTC cites the delay in the case as reason for canceling the scheduled depositions. While speedy disposition of cases is important, such consideration however should not outweigh a thorough and comprehensive evaluation of cases, for the ends of justice are reached not only through the speedy disposal of cases but more importantly, through a meticulous and comprehensive evaluation of the merits of the case.45Records also show that the delay of the case is not attributable to the depositions sought by LCDC but was caused by the many pleadings filed by all the parties including petitioners herein. The argument that the taking of depositions would cause unnecessary duplicity as the intended deponents shall also be called as witnesses during trial, is also without merit. The case of Fortune Corp. v. Court of Appeals46 which already settled the matter, explained that: The availability of the proposed deponent to testify in court does not constitute "good cause" to justify the courts order that his deposition shall not be taken. That the witness is unable to attend or testify is one of the grounds when the deposition of a witness may be used in court during the trial. But the same reason cannot be successfully invoked to prohibit the taking of his deposition. The right to take statements and the right to use them in court have been kept entirely distinct. The utmost freedom is allowed in taking depositions; restrictions are imposed upon their use. As a result, there is accorded the widest possible opportunity for knowledge by both parties of all the facts before the trial. Such of this testimony as may be appropriate for use as a substitute for viva voce examination may be introduced at the trial; the remainder of the testimony, having served its purpose in revealing the facts to the parties before trial, drops out of the judicial picture. x x x [U]nder the concept adopted by the new Rules, the deposition serves the double function of a method of discovery - with use on trial not necessarily contemplated - and a method of presenting testimony. Accordingly, no limitations other than relevancy and privilege have been placed on the taking of depositions, while the use at the trial is subject to circumscriptions looking toward the use of oral testimony wherever practicable.47 Petitioner also argues that LCDC has no evidence to support its claims and that it was only after the filing of its Complaint that it started looking for evidence through the modes of discovery. On this point, it is well to reiterate the Courts pronouncement in Republic v. Sandiganbayan48: What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of persons having knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of fishing expedition serve to preclude a party from inquiring into the facts underlying his opponents case. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility, of surprise.49 It also does not escape this Courts attention that the trial court, before dismissing LCDCs complaint, gave LCDC two options: (a) enter into a pre-trial conference, advising LCDC that what it would like to obtain at the deposition may be obtained at the pre-trial conference, thus expediting early termination of the case; and (b) terminate the pre-trial conference and apply for deposition later on. The trial court erred in forcing LCDC to choose only from these options and in dismissing its complaint upon LCDCs refusal to choose either of the two. The information LCDC seeks to obtain through the depositions of Elena Sy, the Finance Officer of Hyatt and Pacita Tan Go, an Account Officer of RCBC, may not be obtained at the pre-trial conference, as the said deponents are not parties to the pre-trial conference. As also pointed out by the CA: x x x To unduly restrict the modes of discovery during trial, would defeat the very purpose for which it is intended, as a pre-trial device. By then, the issues would have been confined only on matters defined during pre-trial. The importance of the modes of discovery cannot be gainsaid in this case in view of the nature of the controversy involved and the conflicting interest claimed by the parties.50 Deposition is chiefly a mode of discovery, the primary function of which is to supplement the pleadings for the purpose of disclosing the real matters of dispute between the parties and affording an adequate factual basis during the preparation for trial.51 Further, in Republic v. Sandiganbayan52 the Court explained that:

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties - before the trial if not indeed even before the pre-trial - should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but also those known to their adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible through the depositiondiscovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been the ample discovery before trial, under proper regulation, accomplished one of the most necessary ends of modern procedure; it not only eliminates unessential issues from trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the pleadings. The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in the dark.53 (emphasis supplied) In this case, the information sought to be obtained through the depositions of Elena and Pacita are necessary to fully equip LCDC in determining what issues will be defined at the pre-trial. Without such information before pre-trial, LCDC will be forced to prosecute its case in the dark --- the very situation which the rules of discovery seek to prevent. Indeed, the rules on discovery seek to make trial less a game of blind mans bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent. 54 Considering the foregoing, the Court finds that the CA was correct in remanding the case to the trial court and ordering the depositions to proceed. WHEREFORE, the petition is denied for lack of merit. Costs against petitioner. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 135874 January 25, 2000

SECURITY BANK CORPORATION, petitioner, vs. COURT OF APPEALS, SPOUSES AGUSTIN P. UY and PACITA TANG* SIOC TEN, DOMINGO UY, and Hon. PRUDENCIO A. CASTILLO JR. in his capacity as presiding judge of the Quezon City RTC (Branch 220), respondents. PANGANIBAN, J.: Litigation should not be carried on in the dark. Courts are given great latitude in enabling the parties to inform themselves of all relevant facts, including those known only to their adversaries. For this reason, the rules on discovery are accorded broad and liberal interpretation.

The Case
Before us is a Petition for Review on Certiorari assailing the July 8, 1998 Decision of the Court of Appeals (CA),1which affirmed the trial court's grant of the Motions, filed respectively by Domingo Uy and Spouses Agustin Uy and Pacita Tang Sioc Ten, for the production and inspection of several documents. Also assailed by petitioner is the October 7, 1998 CA Resolution, which denied petitioner's Motion for Reconsideration.2

The Facts
The facts are summarized by the Court of Appeals (CA) in this wise:3 Petitioner Security Bank Corporation (SBC) is a domestic banking corporation duly organized and existing under Philippine laws. It is one of the defendants in Civil Case No. Q-97-30330 entitled [S]pouses Agustin P. Uy and Pacita Tang Sioc Ten versus Security Bank Corporation, Domingo P. Uy and the Ex-Oficio City Sheriff of Quezon City, for injunction and damages with an application for the issuance of a temporary restraining order and preliminary injunction. Plaintiffs Spouses Agustin P. Uy and Pacita Tang Sioc Ten sought to enjoin Security Bank Corporation (SBC for brevity) and the ExOficio Sheriff of Quezon City from proceeding with the extra-judicial foreclosure of a mortgage over a piece of property registered under the respondent spouses' names located at Cubao, Quezon City and covered by TCT No. RI-8731 (281736). On February 25, 1997, a temporary restraining order was issued by Hon. Pedro M. Areola of the Regional Trial Court of Quezon City (Branch 85) where the case was originally assigned. The temporary restraining order was lifted on April 8, 1997 when Judge Areola resolved to deny the spouses' application for a preliminary injunction. This denial prompted the said plaintiffs to file a motion for the inhibition of Judge Areola from hearing the case, hence, the case was re-raffled to Branch 220 presided over by respondent judge, Hon. Prudencio Altre Castillo, Jr. On April 7, 1997, SBC filed its answer with compulsory counterclaim and cross-claim while defendant Domingo P. Uy filed on April 18, 1997 his answer with compulsory counterclaim and cross-claim. SBC filed its answer to defendant Domingo Uy's cross-claim on April 28, 1997. Before filing his answer to defendant SBC's cross-claim, defendant Domingo P. Uy filed an Omnibus Motion (Production of Documents and Suspension and/or Extension of Time to File Answer to Cross-Claim) on the ground that all documents, papers and instruments made and executed by SBC on the evaluation, processing and approval of the loans of Jackivi Trading Center, Inc., the real estate mortgages (REM) and the Special Power of Attorney (SPA) themselves must first be produced before he [could] prepare and file the answer to SBC's cross-claim. SBC filed its opposition to the aforesaid motion of Domingo Uy. In return defendant Domingo Uy filed a motion to admit reply with the reply attached and on June 3, 1997 SBC filed its rejoinder.1wphi1.nt Acting on defendant Uy's Omnibus Motion (Production of Documents and Suspension and/or Extension of Time to File Answer to Cross-Claim) the trial court issued an Order on June 25, 1997 denying the motion. On July 16, 1997, Domingo P. Uy moved for the reconsideration of denial by filing an Omnibus Motion (Motion for Reconsideration and/or Extension of Time to File Answer to Cross-Claim). On the other hand, plaintiffs also filed their Motion (For Production, Inspection and Copying of Documents) praying for the issuance of an order directing SBC to produce and allow them to inspect and copy the original and additional mortgage contracts executed by Jackivi Trading Center, Inc. and/or Jose Tanyao. Defendant SBC opposed the motion on July 25, 1997 by filing its Consolidated Opposition to the spouses' Motion for Production, Inspection and Copying of Documents and Urgent Motion for a temporary restraining order and a writ of preliminary injunction. Respondent spouses filed their reply to the aforementioned consolidated opposition of SBC.

On August 3, 1997, SBC filed its opposition to respondent Domingo Uy's motion for reconsideration of the Order dated June 25, 1997. On October 2, 1997, the trial court issued the first assailed Order, the dispositive portion of which states, thus: WHEREFORE, premises considered, defendant Security Bank Corporation is hereby ordered to produce and permit defendant Domingo P. Uy to inspect, copy or photograph the documents, papers and instruments made and executed on the evaluation, processing and approval of the loans of Jackivi Trading Center, Inc., during usual business hours and day after at least three (3) days notice in advance by defendant Domingo P. Uy to defendant Security Bank Corporation. However, the filing of the answer to cross-claim need not await the production of the documents. Defendant Uy is given, for the last time, ten (10) days from receipt within which to file answer to the cross-claim of defendant Security Bank Corporation, stating only the ultimate facts without including evidentiary matters. Defendant Security Bank Corporation is hereby ordered to produce and permit plaintiff[s] to inspect, copy or photograph the original and additional mortgage contracts executed by Jackivi Trading Center, Inc. and/or Mr. Jose Tanyao within which (sic) usual business hours and day after at least three (3) days notice in advance by plaintiff to defendant Security Bank Corporation. The application for issuance of temporary restraining order is hereby DENIED. In the meantime, set the case for hearing on the application for issuance of writ of preliminary injunction on October 31, 1997, at 8:30 o'clock in the morning. Furnish the parties and counsels with a copy of this Order. SO ORDERED. SBC filed a motion for partial reconsideration of the Order, claiming that said order [did] not explain the basis for requiring it to produce the requested documents, and that there was no good cause for their production, hence, it cannot be compelled to produce the same. Acting on the aforesaid motion, respondent judge issued the second assailed Order on November 25, 1997 denying the Motion for Partial Reconsideration.

Ruling of the Court of Appeals

Affirming the trial court, the Court of Appeals held:4 It will be noted that the only condition imposed by the Rules is that the production of the documents must be for "good cause." Contrary to the allegation of petitioner that respondent Domingo Uy ha[s] not shown good cause for the production of such documents, said respondent has sufficiently shown the good cause on which his motion is anchored [] that of being able to intelligently prepare his defenses against the cross-claim of petitioner SBC. On the other hand, the motion for production filed by the respondents spouses Uy and Pacita Tang Sioc Ten is likewise for good cause, it being necessary for a full determination of the issues raised in Civil Case No. Q-97- 30330. "Good cause" does not relate to the substance in the document but to the reason for producing relevant or material matters therein; so that the enforcement of the rule entails exercise of sound discretion. The burden is on the moving party to demonstrate the need for the documents sought beyond the relevancy or materiality of the evidence therein. Hence, this Petition.5 The Issue In its Memorandum, petitioner submits this lone issue for the consideration of the Court:6 Whether or not the Honorable Court of Appeals committed grave abuse of discretion7 when it sustained the Orders of the Respondent Regional Trial Court dated 02 October 1997 and 25 November 1997 which granted the respective Motions [For Production, Inspection and Copying of Documents] of Respondents Spouses Agustin P. Uy and Pacita Tang Sioc Ten and Domingo Uy. In the main, the Court is being asked to determine whether the appellate court erred in affirming the grant of the two Motions for production and inspection of documents.

The Court's Ruling

The Petition is bereft of merit.

Main Issue:

Grant of Motions for Production and Inspection of Documents

Petitioner Security Bank Corporation (SBC) maintains that, in sustaining the grant of the Motions for production, inspection and copying of documents filed by private respondents, the CA grossly misconstrued and misapplied Section 1, Rule 27 of the Rules of Court. Petitioner stresses that the CA erred in focusing only on the requirement of "good cause" and in ignoring the prerequisite of relevancy. Moreover, petitioner contests the "good cause" invoked by the CA. Specifically, it contends that the "good cause," which Respondent Domingo Uy relied upon to be able to prepare an answer to the cross-claim against him, was negated by the rulings of both the trial court and the CA requiring him to file such answer without awaiting the production of the documents sought. We disagree with petitioner. Section 1, Rule 27 of the 1997 Rules of Court provides: Sec. 1. Motion for production or inspection; order. Upon motion of any party showing good cause therefor, the court in which an action is pending may (a) order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects or tangible things not privileged, which constitute or contain evidence material to any matter involved in the action and which are in his possession, custody or control; or (b) order any party to permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying, or photographing the property or any designated relevant object or operation thereon. The order shall specify the time, place and manner of making the inspection and taking copies and photographs, and may prescribe such terms and conditions as are just. In Republic v. Sandiganbayan,8 the Court discussed exhaustively the significance of the various modes of discovery, an example of which is the aforecited provision. In sum, the Court held that the said Rule aims to enable the parties to inform themselves, even before the trial, of all the facts relevant to the action, including those known only to the other litigants. Through this procedure, "civil trials should not be carried on in the dark." We quote: . . . Indeed, it is the purpose and policy of the law that the parties before the trial if not indeed even before the pre-trial should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but also those known to their adversaries; in other words, thedesideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample discovery before trial, under proper regulation, accomplishes one of the most necessary ends of modern procedure: it not only eliminates unessential issues from trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. . . . As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the pleadings. The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in the dark. It is clear that courts are given wide latitude in granting motions for discovery in order to enable parties to prepare for trial or otherwise to settle the controversy prior thereto. Thus, in the same case, the Court further held: What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of persons having knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a broad

and liberal treatment. No longer can the time-honored cry of 'fishing expedition' serve to preclude a party from inquiring into the facts underlying his opponent's case. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that

end, either party may compel the other to disgorge whatever facts he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility, of surprise. . . .9 In the present case, the CA did not err in affirming the trial court ruling that there was "good cause" for the grant of the Motions for inspection of documents. The latter's holding that the documents were not indispensable to the preparation of the answer of Uy to the cross-claim did not militate against respondents' availment of this important mode of discovery. As he himself averred in his Motion, the subject documents were "material and important to the issues raised in the case in general, and as between defendant and SBC in particular."10 Verily, the CA noted that the documents would enable Respondent Uy to "intelligently prepare his defenses against the cross-claim of petitioner SBC,"11 and not merely to formulate his answer. Likewise, we agree with the appellate court that the Motion of Spouses Agustin Uy and Pacita Tang Sioc Ten was for a good cause, because the said documents were "necessary for a determination of the issues raised in Civil Case No. Q-97-30330."12 Indeed, litigation is essentially an abiding quest for truth undertaken not by the judge alone, nut jointly with the parties. Litigants, therefore, must welcome every opportunity to achieve goal; they must act in good faith to reveal documents, papers and other pieces of evidence material to the controversy. In Alonzo v. Villamor,13 the Court ruled: A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is, rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then,

brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done on the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts. There should be no vested right in technicalities. . . .

Materiality of the Subject Documents

Petitioner points out that a party may be compelled to produce or allow the inspection of documents if six procedural requisites are complied with, viz.: (a) The party must file a motion for the production or inspection of documents or things, showing good cause therefor; (b) Notice of the motion must be served to all other parties of the case; (c) The motion must designate the documents, papers, books, accounts, letters, photographs, objects or tangible things which the party wishes to be produced and inspected; (d) Such documents, etc. are not privileged; (e) Such documents, etc. constitute or contain evidence material to any matter involved in the action; and (f) Such documents, etc. are in the possession, custody or control of the other party.14 Petitioner contends that Requisite "e" has not been satisfied, arguing that respondents have not shown the relevancy or materiality of the documents subject of the Motions. Specifically, it maintains that the documents sought by Spouses Uy and Tang Sioc Ten "the original and additional mortgage contracts executed by Jackivi Trading Center, Inc.15 and/or Mr. Jose Tanyao"16 were not relevant to Civil Case Q-97-30330, which was for the declaration of the nullify of the January 27, 1993 and August 16, 1995 Real Estate Mortgages between Jackivi and petitioner. The existence or the absence of other mortgages executed by Jackivi, petitioner insists, has absolutely no bearing on the said case, because it does not in any way determine the validity or the invalidity of the subject Real Estate Mortgages. Petitioner also argues that the documents sought by Respondent Domingo Uy "all the documents, papers and instruments made and executed by [Petitioner] SBC in the evaluation, processing and approval of the loans to Jackivi . . .17 were not relevant, because the trial court itself ruled that he could prepare his answer to the cross-claim without those documents. These arguments are not persuasive. Section 1 of Rule 27 clearly provides that the documents sought must be "material to any matter involved in the action." Respondents have shown that the subject documents are indeed material to the present action. Indeed, the factual backdrop of the case strengthens respondent's cause. The civil action instituted by the Spouses Uy sought the annulment of two deeds of Real Estate Mortgage between Jackivi and petitioner. They allegedly issued a Special Power of Attorney to Respondent Uy to mortgage their property only for their benefit, not for that Jackivi. Because he mortgaged the property as security for Jackivi's loan, they contend that he exceeded his authority and that the contracts of real estate mortgage were consequently invalid. Petitioner, on the other hand, filed a cross-claim against him, because it "relied on the representations and documents submitted by [the latter] that he was duly authorized to mortgage the subject property."18 In this light, the relevance of the documents sought by Respondent Domingo Uy is readily apparent. The papers executed by the petitioner bank in evaluating and processing the real estate mortgage are manifestly useful in his defense against its cross-claim. The trial court's ruling that he could file his answer without examining those documents does not prove that they are immaterial to the present action. The CA has held that those documents would enable him to "intelligently prepare his defenses against the cross-claim of Petitioner SBC. So also, the additional mortgage contracts executed by Jackivi are material to the present action. Because a witness of petitioner admitted in court that there was a third mortgage contract between Jackivi and the bank, fair play demands that herein respondents must be given the chance to examine such additional mortgage contracts. In so doing, they can determine why petitioner was going after their property which was invalidly mortgaged by Respondent Uy, while the properties of the actual borrower, Jackivi, have not been touched or foreclosed by the bank. Indeed, the rule is that courts, in passing upon a motion for discovery, should be liberal in determining whether the documents in question are relevant to the subject matter of the action.19 To repeat, the rule on discovery "requires the parties to play the game with cards on the table so that the possibility of fair settlement before trial is measurably increased."20 All in all, petitioner failed to show any reversible error on the party of the Court of Appeals. The Motions of respondents were for a good cause, and the documents sought were material to the action pending before the trial court. WHEREFORE, the Petition is DENIED and the assailed Decision is AFFIRMED. Costs against petitioner. SO ORDERED.1wphi1.nt

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 164805 April 30, 2008

SOLIDBANK CORPORATION, NOW KNOWN AS METROPOLITAN BANK AND TRUST COMPANY,petitioner, vs. GATEWAY ELECTRONICS CORPORATION, JAIME M. HIDALGO AND ISRAEL MADUCDOC, respondents. DECISION NACHURA, J.: Before the Court is a petition for review on certiorari1 assailing the Decision dated June 2, 2004 and the Resolution dated July 29, 2004 of the Court of Appeals in CA-G.R. SP No. 73684.

The Facts
In May and June 1997, Gateway Electronics Corporation (Gateway) obtained from Solidbank Corporation (Solidbank) four (4) foreign currency denominated loans to be used as working capital for its manufacturing operations.2 The loans were covered by promissory notes3 (PNs) which provided an interest of eight and 75/100 percent (8.75%), but was allegedly increased to ten percent (10%) per annum, and a penalty of two percent (2%) per month based on the total amount due computed from the date of default until full payment of the total amount due.4 The particulars of the loans are: Promissory Note No. a) PN 97-375 b) PN 97-408 c) PN 97-435 d) PN 97-458 Date of Loan 20 May 1997 29 May 1997 09 June 1997 15 June 1997 Amount of Loan Date Due

US$ 190,000.00 11 Nov. 1998 US$ 570,000.00 11 Nov. 1998 US$1,150,000.00 04 June 1998 US$ 130,000.00 15 June 1998

To secure the loans covered by PN 97-3755 and PN 97-408,6 Gateway assigned to Solidbank the proceeds of its Back-end Services Agreement7 dated June 25, 2000 with Alliance Semiconductor Corporation (Alliance). The following stipulations are common in both PNs: 3. This Note or Loan shall be paid from the foreign exchange proceeds of Our/My Letter(s) of Credit, Purchase Order or Sales Contract described as follows: *** Back-end Services Agreement dated 06-25-96 by and between Gateway Electronics Corporation and Alliance Semiconductor Corporation. 4. We/I assign, transfer and convey to Solidbank all title and interest to the proceeds of the foregoing Letter(s) of Credit to the extent necessary to satisfy all amounts and obligations due or which may arise under this Note or Loan, and to any extension, renewal, or amendments of this Note or Loan. We/I agree that in case the proceeds of the foregoing Letter(s) of Credit prove insufficient to pay Our/My outstanding liabilities under this Note or Loan, We/I shall continue to be liable for the deficiency. 5. We/I irrevocably undertake to course the foreign exchange proceeds of the Letter(s) of Credit directly with Solidbank. Our/My failure to comply with the above would render Us or Me in default of the loan or credit facility without need of demand.8 Gateway failed to comply with its loan obligations. By January 31, 2000, Gateways outstanding debt amounted to US$1,975,835.58. Solidbanks numerous demands to pay were not heeded by Gateway. Thus, on February 21, 2000, Solidbank filed a Complaint9 for collection of sum of money against Gateway. On June 16, 2002, Solidbank filed an Amended Complaint10 to implead the officers/stockholders of Gateway, namely, Nand K. Prasad, Andrew S. Delos Reyes, Israel F. Maducdoc, Jaime M. Hidalgo and Alejandro S. Calderon who signed in their personal capacity a Continuing Guaranty11 to become sureties for any and all existing indebtedness of Gateway to Solidbank. On June 20, 2002, the trial court admitted the amended complaint and impleaded the additional defendants. Earlier, on October 11, 2000, Solidbank filed a Motion for Production and Inspection of Documents12 on the basis of an information received from Mr. David Eichler, Chief Financial Officer of Alliance, that Gateway has already received from Alliance the proceeds/payment of the Back-end Services Agreement. The pertinent portions of the motion read: 8. Therefore, plaintiffs request that this Honorable Court issue an Order requiring defendant GEC, through its Treasurer/Chief Financial Officer, Chief Accountant, Comptroller or any such officer, to bring before this Honorable Court for inspection and copying the following documents: a) The originals, duplicate originals and copies of all documents pertaining to, arising from, in connection with or involving the Back-end Services Agreement of defendant GEC and Alliance Semiconductors;

b) The originals, duplicate originals and copies of all books of account, financial statements, receipts, checks, vouchers, invoices, ledgers and other financial/accounting records and documents pertaining to or evidencing financial and money transactions arising from, in connection with or involving the Back-end Services Agreement of defendant GEC and Alliance Semiconductors; and c) The originals, duplicate originals and copies of all documents from whatever source pertaining to the proceeds/payments received by GEC from Alliance Semiconductors. d) Documents, as used in this section, means all writings of any kind, including the originals and all non-identical copies, whether different from the originals by reason of any notation made on such copies or otherwise, including without limitation, correspondence, memoranda, notes diaries, statistics, letters, telegrams, minutes, contracts, reports, studies, checks, statements, receipts, returns, summaries, pamphlets, books, inter-office and intra-office communications, notations of any sort of conversations, telephone calls, meetings or other communications, bulletins, printed matter, computer records, diskettes or print-outs, teletypes, telefax, e-mail, invoices, worksheets, all drafts, alterations, modifications, changes and amendments of any of the foregoing, graphic or oral records or representations of any kind (including, without limitation, photographs, charts, graphs, microfiche, microfilm, videotapes, recordings, motion pictures, CD-ROMs), and any electronic, mechanical or electric records or representations (including, without limitation, tapes, cassettes, discs, recordings and computer or computer-related memories). 9. Furthermore, plaintiffs request that said Order to the Treasurer/Chief Financial Officer, Chief Accountant, Comptroller of defendant GEC include the following instructions: a. If the response is that the documents are not in defendant GECs or the officers possession or custody, said officer shou ld describe in detail the efforts made to locate said records or documents; b. If the documents are not in defendant GECs or the officers possession and control, said officer should identify who has control and the location of said documents or records; c. If the request for production seeks a specific document or itemized category that is not in defendant GECs or the officers possession, control or custody, the officer should provide any documents he has that contain all or part of the information contained in the requested document or category; d. If the officer cannot furnish the originals of the documents requested, he should explain in detail the reasons therefore; and e. The officer should identify the source within or outside GEC of each of the documents he produces.13 On January 30, 2001, the trial court issued an Order14 granting the motion for production and inspection of documents, viz.: WHEREFORE, the defendant GEC is hereby ordered to bring all the records and documents, not privileged, arising from, in connection with and/or involving the Back-end Services Agreement between defendant GEC and Alliance Semiconductor Corporation, particularly to those pertaining to all payments made by Alliance Semiconductor Corporation to GEC pursuant to said Agreement, incorporating the instructions enumerated in par. 9 of the instant motion, for inspection and copying by the plaintiff, the same to be made before the Officer-In-Charge, Office of the Branch Clerk of Court on February 27, 2001 at 9:00 a.m. SO ORDERED.15 Gateway filed a motion to reset the production and inspection of documents to March 29, 2001 in order to give them enough time to gather and collate the documents in their possession. The trial court granted the motion.16 On April 30, 2001, Solidbank filed a motion for issuance of a show cause order for Gateways failure to comply with the Januar y 30, 2001 Order of the trial court.17 In response, Gateway filed a manifestation that they appeared before the trial court on March 29, 2001 to present the documents in their possession, however, Solidbanks counsel failed to appear on the said date.18 In the manifestation, Gateway also expressed their willingness to make available for inspection at Gateways offices any requested document.19 On May 31, 2001, the trial court issued an Order setting the production and inspection of documents on June 7, 2001 in the premises of Gateway.20 It was subsequently moved to July 24, 2001. On the said date, Gateway presented the invoices representing the billings sent by Gateway to Alliance in relation to the Back-end Services Agreement.21 Solidbank was not satisfied with the documents produced by Gateway. Thus, on December 13, 2001, Solidbank filed a motion to cite Gateway and its responsible officers in contempt for their refusal to produce the documents subject of the January 30, 2001 Order. In opposition thereto, Gateway claimed that they had complied with the January 30, 2001 Order and that the billings sent to Alliance are the only documents that they have pertaining to the Back-end Services Agreement.22 On April 15, 2002, the trial court issued an Order23 denying the motion to cite Gateway for contempt. However, the trial court chastised Gateway for exerting no diligent efforts to produce the documents evidencing the payments received by Gateway from Alliance in relation to the Back-end Services Agreement, viz.: Before this Court is a Motion to Cite Defendant GEC In Contempt For Refusing To Produce Documents Pursuant to the Order Dated 30 January 2001 filed by plaintiff dated December 12, 2001, together with defendant GECs Opposition thereto dated January 14, 2002, as well as plaintiffs Reply dated February 6, 2002 and GECs Rejoinder dated February 27, 2002.

As Courts are cautioned to utilize the power to punish for contempt on the preservative and not on the vindictive, contempt being drastic and extraordinary in nature (Wicker vs. Arcangel, 252 SCRA 444; Paredes-Garcia vs. CA, 261 SCRA 693), this Court is inclined to DENY the present motion. However, as no diligent effort was shown to have been exerted by defendant GEC to produce the documents enumerated in the Order dated January 30, 2001, this Court hereby orders, in accordance with Sec. 3(a), Rule 29 of the Rules of Court, that the matters regarding the contents of the documents sought to be produced but which were not otherwise produced by GEC, shall be taken to be established in accordance with plaintiffs claim, but only for the purpose of this action. SO ORDERED.24 Gateway filed a partial motion for reconsideration of the April 15, 2002 Order. However, the same was denied in an Order 25 dated August 27, 2002. On November 5, 2002, Gateway filed a petition for certiorari26 before the Court of Appeals (CA) seeking to nullify the Orders of the trial court dated April 15, 2002 and August 27, 2002. On June 2, 2004, the CA rendered a Decision27 nullifying the Orders of the trial court dated April 15, 2002 and August 27, 2002. The CA ruled that both the Motion for Production of Documents and the January 30, 2001 Order of the trial court failed to comply with the provisions of Section 1, Rule 27 of the Rules of Court. It further held that the trial court committed grave abuse of discretion in ruling that the matters regarding the contents of the documents sought to be produced but which were not produced by Gateway shall be deemed established in accordance with Solidbanks claim. The fallo of the Decision reads: WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed portion of the Order dated April 15, 2002 and Order dated August 27, 2002, both issued by public respondent, are hereby NULLIFIED andSET ASIDE without prejudice to the filing by private respondent of a new Motion for Production and Inspection of Documents in accordance with the requirements of the Rules. SO ORDERED.28 Solidbank filed a motion for reconsideration of the Decision of the CA. On July 29, 2004, the CA rendered a Resolution29 denying the same. Thus, this petition.

The Issues
I. Whether Solidbanks motion for production and inspection of documents and the Order of the trial court dated January 30, 2001 failed to comply with Section 1, Rule 27 of the Rules of Court; and II. Whether the trial court committed grave abuse of discretion in holding that the matters subject of the documents sought to be produced but which were not produced by Gateway shall be deemed established in accordance with Solidbanks claim.

The Ruling of the Court

We resolve to deny the petition. I Section 1, Rule 27 of the Rules of Court provides: SECTION 1. Motion for production or inspection; order. Upon motion of any party showing good cause therefor, the court in which an action is pending may (a) order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged, which constitute or contain evidence material to any matter involved in the action and which are in his possession, custody or control; or (b) order any party or permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying, or photographing the property or any designated relevant object or operation thereon. The order shall specify the time, place and manner of making the inspection and taking copies and photographs, and may prescribe such terms and conditions as are just. The aforecited rule provides the mechanics for the production of documents and the inspection of things during the pendency of a case. It also deals with the inspection of sources of evidence other than documents, such as land or other property in the possession or control of the other party.30 This remedial measure is intended to assist in the administration of justice by facilitating and expediting the preparation of cases for trial and guarding against undesirable surprise and delay; and it is designed to simplify procedure and obtain admissions of facts and evidence, thereby shortening costly and time-consuming trials. It is based on ancient principles of equity. More specifically, the purpose of the statute is to enable a party-litigant to discover material information which, by reason of an opponent's control, would otherwise be unavailable for judicial scrutiny, and to provide a convenient and summary method of obtaining material and competent documentary evidence in the custody or under the control of an adversary. It is a further extension of the concept of pretrial.31 The modes of discovery are accorded a broad and liberal treatment.32 Rule 27 of the Revised Rules of Court permits "fishing" for evidence, the only limitation being that the documents, papers, etc., sought to be produced are not privileged, that they are in the possession of the party ordered to produce them and that they are material to any matter involved in the action.33 The lament against a fishing expedition no longer precludes a party from prying into the facts underlying his opponents case. Mutual knowledge of all relevant facts gathered by both parties is essential to proper litigation. To th at end, either party may compel the other to disgorge whatever facts he has in his possession.34 However, fishing for evidence that is allowed under the rules is not without limitations. In Security Bank Corporation v. Court of Appeals, the Court enumerated the requisites in order that a party may compel the other party to produce or allow the inspection of documents or things, viz.: (a) The party must file a motion for the production or inspection of documents or things, showing good cause therefor;

(b) Notice of the motion must be served to all other parties of the case; (c) The motion must designate the documents, papers, books, accounts, letters, photographs, objects or tangible things which the party wishes to be produced and inspected; (d) Such documents, etc., are not privileged; (e) Such documents, etc., constitute or contain evidence material to any matter involved in the action, and (f) Such documents, etc., are in the possession, custody or control of the other party.35 In the case at bench, Gateway assigned to Solidbank the proceeds of its Back-end Services Agreement with Alliance in PN Nos. 97-375 and 97-408. By virtue of the assignment, Gateway was obligated to remit to Solidbank all payments received from Alliance under the agreement. In this regard, Solidbank claims that they have received information from the Chief Financial Officer of Alliance that Gateway had already received payments under the agreement. In order to ascertain the veracity of the information, Solidbank availed of the discovery procedure under Rule 27. The purpose of Solidbanks motion is to compel Gateway to produce the documents evidencing payments received from Alliance in connection with the Back-end Services Agreement. Solidbank was able to show good cause for the production of the documents. It had also shown that the said documents are material or contain evidence relevant to an issue involved in the action. However, Solidbanks motion was fatally defective and must be struck down because of its failure to specify with particularity the documents it required Gateway to produce. Solidbanks motion for production and inspection of documents called for a blanket inspection. Solidbanks request for inspection of "all documents pertaining to, arising from, in connection with or involving the Back-end Services Agreement"36 was simply too broad and too generalized in scope. A motion for production and inspection of documents should not demand a roving inspection of a promiscuous mass of documents. The inspection should be limited to those documents designated with sufficient particularity in the motion, such that the adverse party can easily identify the documents he is required to produce.37 Furthermore, Solidbank, being the one who asserts that the proceeds of the Back-end Services Agreement were already received by Gateway, has the burden of proof in the instant case. Burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law.38 Throughout the trial, the burden of proof remains with the party upon whom it is imposed,39until he shall have discharged the same. II The trial court held that as a consequence of Gateways failure to exert diligent effort in producing the documents subject of the Order dated January 30, 2001, in accordance with Section 3(a), Rule 2940 of the Rules of Court, the matters regarding the contents of the documents sought to be produced but which were not produced by Gateway, shall be considered as having been established in accordance with Solidbanks claim. We hold that the trial court committed grave abuse of discretion in issuing the aforesaid Order. It is not fair to penalize Gateway for not complying with the request of Solidbank for the production and inspection of documents, considering that the documents sought were not particularly described. Gateway and its officers can only be held liable for unjust refusal to comply with the modes of discovery if it is shown that the documents sought to be produced were specifically described, material to the action and in the possession, custody or control of Gateway. Neither can it be said that Gateway did not exert effort in complying with the order for production and inspection of documents since it presented the invoices representing the billings sent by Gateway to Alliance in relation to the Back-end Services Agreement. Good faith effort to produce the required documents must be accorded to Gateway, absent a finding that it acted willfully, in bad faith or was at fault in failing to produce the documents sought to be produced.41 One final note. The CA decision nullifying the orders of the trial court was without prejudice to the filing by herein petitioner of a new motion for Production and Inspection of Documents in accordance with the Rules. It would have been in the best interest of the parties, and it would have saved valuable time and effort, if the petitioner simply heeded the advice of the CA. WHEREFORE, in view of the foregoing, the instant petition is DENIED for lack of merit. SO ORDERED.