Civil Procedure 2014

Case Digests (Modes of Discovery)

This is a compilation of case digests covering Modes of Discovery, submitted
to Atty. Jude Fernandez, Professor of Law, University of San Jose-Recoletos,
submitted by Kurt Cajeta, for the course Civil Procedure.


FORTUNE CORPORATION, petitioner, vs. HON. COURT OF APPEALS and
INTER-MERCHANTSCORPORATION, respondents.

Facts:
This is a petition for certiorari of the decision of the respondent CA
affirming the decision of the RTC of San Pablo City disallowing the taking of the
oral deposition of Juanito A. Teope who was the chairman of the Board Directors
of private respondent. An action for breach of contract was filed by the petitioner
against the private respondent and after the latter filed its answer petitioner
served them with written interrogatories pursuant to Rule 25 of the ROC. The
pre-trial was scheduled for January 9, February 12 and April 22, 1992.

On March 26, 1992, petitioner served the private respondent a Notice to
Take Deposition Upon Oral Examination notifying the latter that petitioner
would take the deposition of the chairman in accordance with Section 15, Rule
24. Private Respondent filed an Urgent Motion Not to Take
Deposition/Vehement Opposition to Plaintiffs Notice to Take Deposition Upon
Oral Examination alleging that: a) petitioner has previously availed of one mode
of discovery, b) there is absolutely no sound reason or justification advanced for
the taking of the oral deposition, c)such taking would cause annoyance,
embarrassment and oppression upon the prospective deponent, d) deponent has
no intention of leaving the country, e)the intended deponent is available to
testify in open court if required during the trial on the merits.

Trial court ruled that the deposition should not be taken on the grounds
that the deposition of Juanito A. Teope appears unwarranted since the proposed
deponent had already responded to the written interrogatories of the plaintiff
and has signified his availability to testify in court. The petitioner filed an
original action for certiorari before the SC and was referred to the CA for further
adjudication on the merits. CA ruled dismissing the petition holding that the RTC
has jurisdiction to direct, in its discretion, that a deposition shall not be taken, if
there are valid reasons for the ruling. This is provided for in Sections 16 and 18,
Rule 24 of the ROC which imply that the right of the party to take depositions as
means of discovery is not absolute. They reasoned that: a) proposed deponent
had earlier responded to the written interrogatories; b)deponent had signified
his availability to testify in court; c)to allow the deposition would deprive the
trial court of the opportunity to ask clarificatory question.

With the denial of the petitioners MFR the instant petition was filed with
the SC.

Issue:
Whether or not a party who has resorted to a particular method of
discovery will be barred in subsequently using other discovery devices.

Ruling:
Petition is GRANTED. The questioned decision of respondent Court of
Appeals is hereby REVERSED and SET ASIDE, and judgment is hereby rendered
ORDERING the court a quo to allow herein petitioner to take the deposition upon
oral examination of Juanito S. Teope.

The evident purpose of modes of discovery is 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. 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 witness to testify orally at trial as long as it touches matters which are
not privileged, relevant to the case, done in good faith and in accordance to the
rules.

Although limited, the scope of discovery is to be liberally construed so as to
provide the litigants with information essential to the expeditious and proper
litigation of each of the facts in dispute. Moreover, it cannot be disputed that the
various methods of discovery as provided for in the Rules are clearly intended to
be cumulative, as opposed to alternative or mutually exclusive.

It is quite clear, therefore, and we so hold that under the present Rules the
fact that a party has resorted to a particular method of discovery will not bar
subsequent use of other discovery devices, as long as the party is not attempting
to circumvent a ruling of the court, or to harass or oppress the other party. As a
matter of practice, it will often be desirable to resort to both interrogatories and
depositions in one or the other sequence. Additional lines of inquiry may come to
light after the deposition has been taken, as to which written interrogatories
probably would be adequate, and there is no reason why the examining party
should not be entitled to obtain all the relevant information he desires if no
substantial prejudice is done to the party from whom discovery is sought. On the
other hand, interrogatories may well be used as a preliminary to the taking of
depositions, in order to ascertain what individuals have the information sought.
And, of course, if the answers to interrogatories are evasive or unsatisfactory, the
interrogating party should be able to utilize the more effective method of oral
examination rather than have to reframe interrogatories. Ordinarily, however,
there will be no occasion for a party to use both methods at the same time, at
least to obtain the same information. Most of the times, oral interrogatories are
resorted than written interrogatories because it is more efficient, effective even
when it entails greater expenses.



Republic vs. Sandiganbayan

Facts:
Private respondents are defendants in a Civil Case of the Sandiganbayan
commenced by the Presidential Commission on Good Government in behalf of
the Republic of the Philippines. The complaint which initiated the action was
denominated one "for reconveyance, reversion, accounting, restitution and
damages.

Private respondents filed "motion for leave to file interrogatories under
Rule 25 of the Rules of Court". 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
defendants in the case?" 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."

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
"service of interrogatories before joinder of issue and without leave of court is
premature absent any special or extraordinary circumstances which would
justify the same.

The case was set for pre-trial on July 31, 1989. On July 25, 1989, the PCGG
submitted its PRE-TRIAL. 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.

On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a
pleading denominated "Interrogatories to Plaintiff," and on August 2, 1989, an
"Amended Interrogatories to Plaintiff" as well as a Motion for Production and
Inspection of Documents.

The Sandiganbayan admitted the Amended Interrogatories and granted the
motion for production and inspection of documents, respectively.

PCGG filed a Motion for Reconsideration against Resolution of the
Sandiganbayn admitting the interrogatories and opposition to the Amended
Interrogatories. After hearing, the Sandiganbayan promulgated two Resolutions
on September 29, 1989, the first, denying reconsideration and the second,
reiterating by implication the permission to serve the amended interrogatories
on the plaintiff (PCGG).

Hence, this petition for certiorari.

Issue:
Whether or not the Sandiganbayan committed grave abuse of discretion in
admitting the motion of the private respondents to avail of the two modes of
discovery.

Ruling:
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.

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.

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.

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.

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,
embarrass, or oppress the person subject to the inquiry. And further limitations
come into existence when the inquiry touches upon the irrelevant or encroaches
upon the recognized domains of privilege."

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 that it was
correct for them to seek leave to serve interrogatories, because discovery was
being availed of before an 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." But there was no need for the private respondents to
seek such leave to serve their "Amended Interrogatories to Plaintiff" (dated
August 2, 1989) after they had filed their answer to the PCGG's complaint, just as
there was no need for the Sandiganbayan to act thereon.

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."

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.

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 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. 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.

The petition was dismissed.


Marcelo vs Sandiganbayan

Facts:
On July 27, 1987, the PCGG, on behalf of the Republic, filed a Complaint
with the Sandiganbayan against Marcelo, Fabian Ver (Ver), now deceased, and
Ferdinand and Imelda Marcos for recovery of ill-gotten or unexplained wealth
which they allegedly acquired in unlawful concert with one another. The
complaint, underwent several amendments.

On November 20, 1987, the Republic filed its Second Amended Complaint
to rectify its error in making reference to the "Philippine Amusement and
Gaming Corporation", when it should properly be "Philippine Casino Operators
Corporation

On May 17, 1989, Marcelo filed his Answer to the Second Amended
Complaint attaching thereto a copy of the PN-MFC boat-building contract, the
alleged "favored contract" adverted to. The Republic filed its Reply on June 30,
1989, followed later by his Rejoinder.

Subsequently, the Republic served a Request for Admission dated June 5,
1991 on plaintiff. In his August 15, 1991Response to PCGG's Request for
Admission, plaintiff included his own counter-request for admission on matters
stated in his response.

Following the filing by the Republic of its Pre-Trial Brief,plaintiff submitted
his own Pre-Trial Brief With Written Interrogatories, First Set and Request for
Admission (to admit the truth of the matters of fact stated in his August 15, 1991
reply to the Republic's June 5, 1991 request for admission). On October 15, 1996,
MFC filed its Pre-Trial Brief With Written Interrogatories, First Set and Request
for Admission; the other petitioner corporations, as defendants a quo, filed their
Pre-Trial Briefs with Written Interrogatories First Set on the same day.

On August 15, 1997, the petitioners filed three separate Motion for
Summary Judgment. Plaintiffs motion was based on two major arguments
A.)There is no genuine issue of fact/cause of action against him; and, B.) the
Republic did not reply to the request. Thus, pursuant to Sec. 2, Rule 26 of the
Rules of Court, "each of the matters of which an admission is requested shall be
deemed admitted". According to the petitioners, "the pleadings of the parties,
and the admissions and documentary evidence of the [Republic] show that there
is no genuine issue as to any material fact and that [they] are entitled to a
[summary] judgment as a matter of law".


Issue:
Whether or not The Republics non response to Plaintiffs (Marcelo) written
interrogatories amounts to an admission

Ruling:
There is really no more genuine issues to be tried in this case, the Republic
having failed or refused to answer the requests for admission and the written
interrogatories of the petitioners. As it were, the Republic only answered
petitioner plaintiffs request for admission or interrogatories. But then the
Republic's answer serves only to highlight and confirm the fact that petitioner
plaintiffs participation in all the transactions subject of this case is as President
of MFC. The Republic did not also answer the written interrogatories of the other
defendant corporations. In effect, the Republic admitted the non-participation of
the other defendant corporations in the contracts in question.


REY LAADA, petitioner, vs. COURT OF APPEALS and SPS. ROGELIO and
ELIZA HEMEDEZ, respondents.

Facts:
The Union of Filipro Employees (UFE) declared a strike on account of
alleged unfair labor practices committed by Nestle Philippines, Inc. (Nestle) and
put up a picket line in front of the companys Cabuyao, Laguna factory.

NLRC issued a TRO enjoining the UFE to desist from blocking,
barricading and obstructing the points of ingress and egress from Nestles
Cabuyao plant. To enforce the TRO, Nestle sought the assistance of the Philippine
Constabulary and the fire brigade of Cabuyao. Seeking to transfer its products
from the Cabuyao factory to its warehouse in Taguig during the strike, Nestle
hired 6 cargo trucks from brothers Constancio and Jesus Alimagno.

Alexander Asinas of the UFE and Francis Santos of Nestle agreed to
constitute a panel to discuss said transfer of products, as the matter was not
overed by the TRO. However, in bad faith, Santos instead ordered the PC to
disperse the strikers at the barricades in front of the plant gate so that the trucks
can get out of the plant. The PC and the fire brigade began hitting the strikers
with truncheons and water cannons. With gate cleared, the cargo trucks began
leaving the compound.

Meanwhile, Dr. Vied Vemir Garcia Hemedez was on his way home from
his masteral class at the UP College of Public Health. He arrived at the Nestle
factory while the dispersal was ongoing so he stopped his car. At that time, the
one of the cargo trucks, driven by Pacifico Galasao, was leaving the Nestle
compound at full speed. To avoid stones being thrown at his direction, the truck
driver drove in a crouching position. However, he lost control of the truck and
bumped the car of Dr. Hemedez. Pinned down by his overturned car, Dr.
Hemedez asked someone to inform his parents and pleaded for help from the
people. While extricating Dr. Hemedez from the overturned car, his mother and
brothers repeatedly asked the help of PC soldiers, specifically to unload the cargo
truck to speed up the rescue, but said soldiers refused, saying that the truck
might get looted if they did so.

Dr. Hemedez was pulled out from under his car 2 hours later by his family
members and was rushed to the hospital, where he died shortly after arrival.
Spouses Rogelio and Eliza Hemedez, parents of Dr. Hemedez, sued Nestle, Jesus
Alimagno, Francis Santos, Pacifico Galasao, and PC/Capt. Rey Laada for
damages. After defendants filed their answers to the complaint, the Hemedez
spouses served the defendants a request for admission of the truth of the facts
set forth in their complaint and the genuineness of each of the documents
appended thereto. Through their respective counsel, defendants filed their
verified answer to the request for admission.

The Hemedez spouses moved to strike out said answers and to declare
the matters sought to be admitted as impliedly admitted, contending that
defendants themselves and not their counsel should personally answer the
request for admission. TC denied the spouses motion as well as the MR. On
certiorari in the SC, the matter was referred to the CA. CA granted the motions to
strike out the answers subject of the requests for admission and declared each of
the matters requested to be impliedly admitted. It also remanded the case to the
court a quo for proper proceedings.

Issue:
Should a person to whom a request for admission is addressed personally
answer the request?

Ruling:
NO. PSFC Financial Corp. V CA: Section 23 of Rule 138 provides that
(a)ttorneys have authority to bind their clients in any case by any agreement in
relation thereto made in writing, and in taking appeals, and in all matters of
ordinary judicial procedure x x x . Thus, when Rule 26 states that a party shall
respond to the request for admission, it should not be restrictively construed to
mean that a party may not engage the services of counsel to make the response
in his behalf. Indeed, the theory of petitioner must not be taken seriously;
otherwise, it will negate the principles on agency in the Civil Code, as well as Sec.
23, Rule 138, of the Rules of Court.

In the case at bar, there is no showing that petitioners did not authorize
their respective counsels to file in their behalf their respective answers to the
Hemedez spouses written request for admission. As this Court has said, there is
no reason to strictly construe the phrase the party to whom the request is
directed to refer solely or personally to the petitioners themselves.
Moreover, the subject matters of the request for admission are the same as the
ultimate facts alleged in the complaint to which petitioners have already filed
their respective answers.

Po v. CA: A request for admission is not intended to merely reproduce or
reiterate the allegations of the requesting partys pleading but should set forth
relevant evidentiary matters of fact, or documents described in and exhibited
with the request, whose purpose is to establish said partys cause of action or
defense.

Concrete Aggregates Corporation v. Court of Appeals: 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.

ONG vs. MAZO

Facts:
Respondents filed a complaint for damages against petitioner, such
complaint arose from a vehicular accident whereby a bus owned by petitioner
and driven by Caramoan allegedly bumped a jeep owned and driven by
respondent Lanuevo, with respondent Tomilloso as her passenger at the time.
On November 14, 1996, petitioner served written interrogatories upon
respondents and on November 21, 1996, she filed a "Manifestation and Omnibus
Motion" seeking, among other things, an order from the trial court directing
respondents to answer the interrogatories.

To the motion bearing on the written interrogatories, respondents filed
their objection.

By Order of May 6, 1999, the trial court denied the motion to compel
respondents to answer the interrogatories upon the ground that it constituted a
"fishing expedition" which would be more properly ventilated in a pre-trial
conference.

Thus, petitioner filed on with the Court of Appeals a petition for certiorari
assailing the above order of the trial court as having been issued with grave
abuse of discretion amounting to lack or excess of jurisdiction for denying the
motion to compel respondents to answer the written interrogatories.

Issues:
1. Whether or not the trial court erred in denying the motion to compel the
respondents to answer the written interrogatories.

2. Whether or certiorari is the proper recourse for such an error.

Ruling:
No doubt, the twin orders denying the written interrogatories were
interlocutory in nature for they leave something more to be done on the merits
of the case. And the extraordinary writ of certiorari is generally not available to
challenge an interlocutory order of a trial court, the proper remedy in such cases
being an ordinary appeal from an adverse judgment where incorporated in said
appeal are the grounds for assailing the interlocutory order. Nonetheless, this by
no means is an absolute rule. If the assailed interlocutory order is patently
erroneous and the remedy of appeal would not afford adequate and expeditious
relief, certiorari may be allowed as a mode of redress.

This Court finds that the orders disallowing petitioner's written
interrogatories are patently erroneous, hence, the resort to certiorari is
warranted. In denying petitioner's availment of interrogatories, the trial court
was of the view that

. . . in as much that the written interrogatories is (sic) a sort of fishing
expedition, said questions and answer would be properly ventilated in a pre-trial
conference for which this court direct the defendant Elena Ong to file her answer to
the amended complaint anent thereto, both parties are required to file their
respective pre-trial briefs after which this case will be calendared for pre-trial
conference.

This Court has long espoused the policy of encouraging the availment of the
various modes or instruments of discovery as embodied in Rules 24 to 29 of the
Revised Rules of Court. Thus, in Republic v. Sandiganbayan, it held:

. . . 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 deposition-discovery mechanism set forth in Rules 24 to
29.

The thrust of the Rules is to even make the availment of the modes of
discovery depositions, interrogatories and requests for admissions without
much court intervention since leave of court is not necessary to put into motion
such modes after an answer to the complaint has been served. The rationale
behind the recognition accorded the modes of discovery is that they enable a
party to discover the evidence of the adverse party and thus facilitate an
amicable settlement or expedite the trial of the case.

Thus, to deny a party the liberty to have his written interrogatories
answered by his opponent, as what the trial court did, on the premise that the
interrogatories were a "fishing expedition," is to disregard the categorical
pronouncement in aforementioned case of Republic vs. Sandiganbayan that the
time-honored cry of 'fishing expedition' can no longer provide a reason to
prevent a party from inquiring into the facts underlying the opposing party's
case through the discovery procedures.

The trial court's orders, not being in accordance with law and
jurisprudential dictum, are therefore correctible by writ of certiorari.



Landoil vs. Mangudadatu

Facts:
Respondent-Spouses Suharto and Miriam Sangki Mangudadatu filed with
the (RTC) a Complaint for damages against Petitioner Jonathan Landoil
International Co., Inc. ("JLI"). The petitioner had countered with a Motion to
Dismiss; but when this was denied, it filed its Answer. The parties submitted
their respective Pretrial Briefs. Trial proceeded without the participation of
petitioner, had led the trial court to declare it in default. Petitioner received a
copy of the RTCs Decision. it filed an Omnibus Motion for New Trial and Change
of Venue. This Motion was deemed submitted for resolution but was eventually
denied by the trial court. Petitioner received a copy of a Writ of Execution.
Alleging that it had yet to receive a copy of an Order resolving the Omnibus
Motion for New Trial, petitioner filed a Motion to Quash/Recall Writ of
Execution.

Its counsels -- Attys. Jaime L. Mario Jr. and Dioscoro G. Peligro -- submitted
separate withdrawals of appearance. On the same date, the law firm Ong Abad
Santos & Meneses filed an Entry of Appearance with Supplement to Motion to
Quash/Recall Writ of Execution. Petitioner attached the Affidavits of Attys. Mario
and Peligro attesting that they had not yet received a copy of the Order resolving
the Omnibus Motion for New Trial.On the same day, petitioner received a
Sheriffs Notice, regarding the public auction sale of its properties. By reason of
the immediate threat to implement the Writ of Execution, it filed with the CA a
Petition for Prohibition seeking to enjoin the enforcement of the Writ until the
resolution of the Motion to Quash. The RTC issued an Order directing
respondents to file their written comment on the Motion to Quash and scheduled
the hearing.

Issues:
1.Whether petitioner received the Order denying its timely filed Motion for
New Trial.

2.Whether the taking of oral depositions was proper under the
circumstances.

Ruling:
1. Appreciation of Facts

It is readily apparent that petitioner is raising factual issues that this Court
does not review. While the rule admits of exceptions, petitioner has not
satisfactorily shown any. No compelling reason to disturb the CAs factual
findings. It may therefore not insist, contrary to the finding of the CA, that it did
not receive the Order denying its timely filed Motion for New Trial.

Motion for New Trial Improper

The explanation offered by petitioner as regards the absence of its counsel
from the pretrial is unacceptable. It should have also justified its own absence.
Having failed to do so, it had no valid ground to request a new trial. Petitioner
also failed to justify the absence of both its counsels. Until their formal
withdrawal is granted, lawyers are deemed to be the representatives of their
clients. Atty. Fernandez absence from the pretrial was still not excusable. While
he could no longer represent petitioner, his presence would have afforded him
an opportunity to make a formal withdrawal of appearance. An improvident
termination of legal services is not an excuse to justify non-appearance at a
pretrial. Otherwise, the rules of procedure would be rendered meaningless, as
they would be subject to the counsels will.

The Proper Remedy

Under the new Rules, the consequence of non-appearance without cause at
the pretrial is not for the petitioner to be considered "as in default," but "to allow
the plaintiff to present evidence ex parte and [for] the court to render judgment
on the basis thereof." To the trial courts order allowing the ex parte
presentation of evidence by the plaintiff, the defendants remedy is a motion for
reconsideration. An affidavit of merit is not required to be attached to such
motion, because the defense has already been laid down in the answer. In the
present case, petitioner did not file a motion for reconsideration after the trial
court had allowed respondents ex parte presentation of evidence. The Rules of
Court does not prohibit the filing of a motion for a new trial despite the
availability of a motion for reconsideration. But the failure to file the latter
motion -- without due cause -- is a factor in determining whether to apply the
liberality rule in lifting an order that allowed the ex parte presentation of
evidence. In its motions and petitions filed with this Court and the lower courts,
petitioner did not explain why it had failed to file a motion for reconsideration.

The lapse of time it shows the negligence of petitioner and its counsels.

Non-Receipt of the Order

Petitioner fails to convince us that it has not received the trial courts Order
denying its Motion for New Trial. There is a disputable presumption that official
duties have been regularly performed. On this basis, we have ruled that the
postmasters certification prevails over the mere denial of a lawyer. This rule is
applicable here. Petitioner has failed to establish its non-receipt of the trial
courts Order denying its Motion for New Trial.

2. The Taking of Depositions

The present case involved a circumstance that fell under the Section
4(c)(2) of Rule 23 -- the witnesses of petitioner in Metro Manila resided beyond
100 kilometers from Sultan Kudarat, the place of hearing. Petitioner offered the
depositions in support of its Motion to Quash (the Writ of Execution) and for the
purpose of proving that the trial courts Decision was not yet final. As previously
explained, despite the fact that trial has already been terminated, a deposition
can still be properly taken.

The RTC did not totally disregard petitioners depositions. the trial court
considered and weighed -- against all other evidence -- that its Order denying the
Motion for New Trial filed by petitioner had not been received by the latters
counsels. Despite their depositions, petitioner failed to prove convincingly its
denial of receipt.



Hyatt Industrial Manufacturing Corp. v. Ley Construction

Facts:

Respondent LCDC filed a complaint for specific performance and damages
against petitioner Hyatt claiming that Hyatt reneged in its obligation to transfer
40% of its share of a real property despite respondents full payment of the
purchase price and that Hyatt failed to develop the said property in a joint
venture, despite LCDC's payment of 40% of the pre-construction cost.
Respondent filed an amended complaint impleading Princeton as additional
defendant claiming that Hyatt sold the property in fraud of defendant. LCDC filed
a second amended complaint adding as defendant Yu He Ching, alleging that
LCDC paid to Hyatt through Yu.

Responsive pleadings were filed and LCDC filed notices to take depositions.
During the scheduled depositions, 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. RTC agreed and on the
same day ordered all depositions cancelled and pre-trial to take place. LCDC
moved for reconsideration, RTC denied.

While pre-trial proceeded with the refusal of LCDC to enter in pre-trial,
Hyatt, Yu and Princeton moved to declare LCDC non-suited, which the RTC
granted. Defendant filed an appeal, which the CA granted. Hyatt and Princeton
filed their respective motions for reconsideration which the CA denied, which
leads to this petition for review on certiorari.

Issue:
Whether or not the CA erred in remanding the case to the trial court and
order the deposition-taking to proceed.

Ruling:
No. A deposition 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. 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.

Indeed, the importance of discovery procedures is well recognized by the
Court. 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.

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.


Sales v. Sabino G.R. No. 133154, December 9, 2005

Facts:
Respondent Cyril A. Sabino filed an amended complaint for damages
against Jowel Sales, driver of the vehicle involved in the accident which
ultimately caused the death of respondent's son, Elbert. Before any responsive
pleading could be filed, plaintiff notified the defendants that he will take the
deposition of one Buaneres Corral. The deposition on oral examination of
Buaneres Corral was taken before the Clerk of Court of Pasig, in the presence and
with the active participation of petitioner's counsel, Atty. Roldan Villacorta, who
even lengthily cross-examined the deponent. In the course of trial, respondent
had the deposition of Buaneres Corral. Upon conclusion of her evidentiary
presentation, respondent made a Formal Offer of Exhibits. Petitioner opposed
the admission of exhibits and even asked that they be expunged from the records
on the ground that the jurisdictional requirements for their admission under
Section 4, Rule 23 of the Rules of Court were not complied with. The trial court
admitted the exhibits. Petitioner went on certiorari to the CA when the trial court
denied his motion for reconsideration, which CA denied explaining that
petitioner's active participation, through counsel, during the taking of subject
deposition and adopting it as his own exhibits, has thereby estopped him from
assailing the admissibility thereof as part of respondent's evidence.

Issue:
Whether or not the respondent satisfied the requirements of Section 3,
Rule 24 of the Rules of Court, when it presented a certification attesting to the
fact that deponent has left the country but silent as to whether or not at the time
his deposition was offered in evidence is in the Philippines.

Ruling:
While depositions may be used as evidence in court proceedings, they are
generally not meant to be a substitute for the actual testimony in open court of a
party or witness. Stated a bit differently, a deposition is not to be used when the
deponent is at hand. Indeed, any deposition offered during a trial to prove the
facts therein set out, in lieu of the actual oral testimony of the deponent in open
court, may be opposed and excluded on the ground of hearsay. However,
depositions may be used without the deponent being called to the witness stand
by the proponent, provided the existence of certain conditions is first
satisfactorily established. Among the exceptions for the admissibility of a
deposition is when the witness is out of the country.

Trial court had determined that deponent Bueneres Corral was abroad
when the offer of his deposition was made. This factual finding of absence or
unavailability of witness to testify deserves respect, having been adequately
substantiated. As it were, the certification by the Bureau of Immigration provides
that evidentiary support. Accordingly, the attribution of grave abuse of
discretion on the part of the trial court must be struck down. It has been said to
be customary for courts to accept statements of parties as to the unavailability of
a witness as a predicate to the use of depositions. Had deponent Buaneres Corral
indeed returned to the Philippines subsequent to his departure, petitioner could
have presented evidence to show that such was the case. As it is, however, the
petitioner does not even assert the return as a fact, only offering it as a
possibility since no contrary proof had been adduced.


Cariaga vs. Court of Appeals

Facts:
Luis Miguel Aboitiz, then employed at DLPC, initiated a covert operation
with the objectives to ascertain how DLPC material were being stolen, the
frequency of thefts, who were perpetrating such and to catch at least one DLPC
employee that may be involved. He sought the assistance of Sgt. Villasis, Chief of
the Theft & Robbery Section of the San Pedro Patrol Station, Davao
METRODISCOM. He also hired one Florencio Siton, a welder by occupation and a
Civilian Home Defense Forces member, as his undercover agent under the
pseudonym Canuto Duran, an electrician from Kabakan, Cotabato.

Canuto struck an acquaintance with one Ricardo Cariaga, a private
electrician at the Miguel Store. He told Ricardo that his boss ordered him to buy
electrical materials. Ricardo offered to supply Canuto with electrical materials,
saying that he has a cousin from whom he can procure the same. Canuto
purchased small electrical wires, which, according to Ricardo, came from his
cousin, Jonathan Cariaga. Ricardo introduced Canuto to Jonathan at Miguel Store.
It turned out that Jonathan was the assigned driver of DLPC Service Truck 'S-
143' assigned to Work Gang 'Venus'. It turned out that the supplies were being
pilfered from the truck, and properties of DLPC.

The prosecution was unable to present Ricardo as its witness as the
subpoena could not be personally served upon him as according to his wife he
was in Sultan Kudarat and the date of his return to Davao City was not certain.

RTC rendered judgment based on prosecutions evidence, with the
statements in the extrajudicial confessions of Ricardo Cariaga implicative of the
accused as the source of the stolen articles formidable compared to the mere
puny denial of the accused. CA affirmed the decision on appeal by Jonathan
Cariaga, hence the instant petition.

Issue:
Whether or not the trial court erred in admitting in evidence the sworn
statement of Ricardo Cariaga.

Ruling:
Yes. Court emphasized that "the preconditions set forth in Section 47, Rule
130 for the admission of testimony given by a witness out of court must be
strictly complied with and that there is more reason to adopt such a strict rule in
the case of Section 1(f) of Rule 115, for apart from being a rule of evidence with
additional specific requisites to those prescribed by Section 47, more
importantly, said provision is an implementing translation of the constitutional
right of an accused person "to meet the witnesses (against him) face to face." In
Tan vs. CA, it was ruled that "'unable to testify' or for that matter 'unavailability',
does not cover the case of witnesses who were subpoenaed but did not appear. It
may refer to inability proceeding from a grave cause, almost amounting to death,
as when the witness is old and has lost the power of speech. It does not refer to
tampering of witnesses." The threshold question then is the admissibility of the
sworn statement of Ricardo Cariaga which was attached to DLPC's position
paper in the labor case filed by Jonathan Cariaga against it for illegal dismissal.
The records reveal that witness Ricardo Cariaga was subpoenaed only once and
did not appear to testify in the criminal case against petitioner. Concededly, this
witness was not deceased or out of the Philippines. In fact, the private
prosecutor informed the court that he is in Sultan Kudarat, and previously, his
wife informed the sheriff that he was in Sultan Kudarat which is in Cotabato, a
mere four hours drive from Davao City. Against this backdrop, can this witness
be categorized as one that cannot be found despite due diligence, unavailable or
unable to testify.

It must be emphasized that Sec. 47 of Rule 130 of the Rules on Evidence is
strictly complied with in criminal cases, hence, "mere sending of subpoena and
failure to appear is not sufficient to prove inability to testify. The Court must
exercise its coercive power to arrest." In the instant case, no efforts were exerted
to have the witness arrested, which is a remedy available to a party-litigant in
instances where witnesses who are duly subpoenaed fail to appear. On this score
alone, the sworn statement of Ricardo Cariaga should not have been admitted as
evidence for the prosecution, and we shall no longer delve into the other aspects
of this rule.

The trial judge who sees and hears witnesses testify has exceptional
opportunities to form a correct conclusion as to the degree of credit which
should be accorded their testimonies. The rule has also always been that the
contradictions between the contents of an affiant's affidavit and his testimony on
the witness stand do not always militate against the witness' credibility because
we have long taken judicial notice that affidavits, which are usually taken ex
parte, are often incomplete and inaccurate. Indeed, a sworn statement taken ex
parte is generally considered to be inferior to a testimony given in open court as
the latter is subject to the test of cross-examination.

There is no rule of evidence to the effect that omission of certain
particulars in a sworn statement would estop an affiant from making an
elaboration thereof or from correcting inaccuracies during the trial.


Dulay vs. Dulay

Facts:
In a complaint for recovery of his bank deposit with prayer for a writ of
attachment and damages, Rodrigo S. Dulay, a naturalized American citizen,
alleged that upon his petition his brother Godofredo Sr. and nephew Pfeger
immigrated to the United States of America. The two stayed with him in his
house at Claremont, Massachusetts. Godofredo, however, decided to return to
the Philippines because he could not endure the weather. Pfeger stayed behind
to take care of Rodrigo.

Having nurtured affection, love and trust for his nephew Pfeger, Rodrigo
opened a trust account with the Bank of Boston naming Pfeger as trustee thereof.
Five months later, Pfeger left Rodrigo's house allegedly to join his girlfriend in
California. Rodrigo learned only later that Pfeger actually went back to the
Philippines. Pfeger returned to the United States, but after a brief stay returned
again to the Philippines where he went on a spending binge. Upon knowing this,
Rodrigo verified the status of his account with the Bank of Boston, and to his
shock and dismay discovered that Pfeger had already emptied the account.

Rodrigo additionally claimed that Pfeger used the money from said account
to buy several vehicles, loan money to several people, open bank accounts for his
siblings, and buy a house and lot and jewelry for his wife. Whatever was left of
the account was allegedly transferred to Pfeger's father, Godofredo. Denying the
accusations, respondent claimed that the money deposited in the name of Pfeger
was his own money and not Rodrigo's. They assailed the admissibility of the
statement of account and the supporting affidavit attached to the complaint. For
his part, Pfeger asserted that he spent his own money. Rodrigo filed a petition for
the issuance of letters rogatory in order to get the depositions of several
witnesses residing abroad. Petitioners, on the other hand, moved to be allowed
to file cross-examination questions to respondent's written interrogatories,
which the trial court granted.

Petitioners filed a motion to dismiss the complaint which was denied,
which instead Rodrigo to complete his depositions. As it turned out, however, the
depositions could not be taken before the Clerk of Court of Massachusetts, but
were taken instead before a notary public in New York. The trial court directed
respondent to have the written and cross interrogatories taken by the notary
public authenticated by the consulate. Thus, respondent filed a motion to
withdraw the answers so that he could have them authenticated by a Philippine
consul in the United States.

Issue:
Whether or not the documents submitted by respondent were violaitve of
Sections 11, 12, and 14 of Rule 23 of the Rules of Court.

Ruling:
No. In our jurisdiction, depositions in foreign countries may be taken: (a)
on notice before a secretary of embassy or legation, consul general, consul, vice
consul, or consular agent of the Republic of the Philippines; (b) before such
person or officer as may be appointed by commission or under letters rogatory;
or (c) before any person authorized to administer oaths as stipulated in writing
by the parties. While letters rogatory are requests to foreign tribunals,
commissions are directives to officials of the issuing jurisdiction.

Generally, a commission is an instrument issued by a court of justice, or
other competent tribunal, directed to a magistrate by his official designation or
to an individual by name, authorizing him to take the depositions of the
witnesses named therein, while a letter rogatory is a request to a foreign court to
give its aid, backed by its power, to secure desired information. Commissions are
taken in accordance with the rules laid down by the court issuing the
commission, while in letters rogatory, the methods of procedure are under the
control of the foreign tribunal.

Leave of court is not required when the deposition is to be taken before a
secretary of 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. However, if the deposition is to be taken in a foreign country where
the Philippines has no secretary of embassy or legation, consul general, consul,
vice-consul or consular agent, it may be taken only before such person or officer
as may be appointed by commission or under letters rogatory.

In the instant case, the authentication made by the consul was a ratification
of the authority of the notary public who took the questioned depositions. The
deposition was, in effect, obtained through a commission, and no longer through
letters rogatory. It must be noted that this move was even sanctioned by the trial
court by virtue of its order. With the ratification of the depositions in issue, there
is no more impediment to their admissibility.

Besides, the allowance of the deposition cannot be said to have caused any
prejudice to the adverse party. They were given the opportunity to cross-
examine the witnesses through their cross-interrogatories, which were in turn
answered by the deponents. Save for the complaint of delay in the proceedings,
petitioners were unable to point out any injury they suffered as a result of the
trial court's action.


AMERICAN AIRLINES, petitioner, vs. COURT OF APPEALS, HON. BERNARDO
LL. SALAS and DEMOCRITO MENDOZA, respondents.

Facts:
Private respondent purchased from Singapore Airlines in Manila
conjunction tickets from Singapore Airlines for nine cities in different countries
with New York as the final destination. In Geneva, private respondent bought
from petitioner a ticket in exchange for the unused conjunction ticket for a one-
way ticket from Geneva to New York. However, because of the embarrassment
and mental anguish he suffered in Geneva when he was prevented by
petitioner's security officer from boarding the plane, detained for about an hour
and allowed to board the plane only after all the other passengers have boarded,
private respondent filed an action for damages against petitioner in Cebu.

Petitioner moved to dismiss on the ground of improper venue and that the
ticket issued by petitioner in Geneva was a separate and distinct contract of
carriage from that entered into by the private respondent with Singapore
Airlines in Manila. When its motion was denied, petitioner presented a
deposition of its security officer taken in Geneva. The trial court ruled that under
the pool partnership agreement among the IATA members, including Singapore
Airlines and American Airlines, the members act as agents of each other in the
issuance of tickets. This decision was affirmed on appeal by the Court of Appeals.

In SP no. 30946, the petitioner assails the trial court's order denying the
petitioner's motion to dismiss the action for damages filed by the private
respondent for lack of jurisdiction under Section 28 (1) of the Warsaw
Convention; and in SP No. 31452 the petitioner challenges the validity of the trial
court's order striking off the record the deposition of the petitioner's security
officer taken in Geneva, Switzerland for failure of the said security officer to
answer the cross interrogatories propounded by the private respondent. Hence,
this petition. Meanwhile, the security officer of petitioner subsequently appeared
before the Philippine consul and answered the cross-interrogatories of private
respondent.

Issue:
Whether or not the trial court committed grave abuse of discretion in
ordering the deposition of the petitioner's security officer taken in Geneva to be
stricken off the record for failure of the said security officer to appear before the
Philippine consul in Geneva to answer the cross-interrogatories filed by the
private respondent.

Ruling:

The subsequent appearance of the said security officer before the
Philippine consul in Geneva on September 19, 1994 and the answer to the cross-
interrogatories propounded by the private respondent was transmitted to the
trial court by the Philippine consul in Geneva on September 23, 1994 should be
deemed as full compliance with the requisites of the right of the private
respondent to cross-examine the petitioner's witness. The deposition filed by the
petitioner should be reinstated as part of the evidence and considered together
with the answer to the cross-interrogatories.



Heirs of Pedro Pasag vs. Sps. Parocha

Facts:
Petitioners filed a Complaint for Declaration of Nullity of Documents and
Titles, Recovery of Possession and Ownership, Reconveyance, Partition and
Damages filed by against respondents. Petitioners alleged a share over three
properties owned by respondents, which formed part of the estate of petitioners'
deceased grandparents, Benito and Florentina Pasag. They averred that their
grandparents died intestate, thus, leaving behind all their properties to their
eight children Pedro, Isidro, Basilio, Severino, Bonifacio, Maria, Juanita, and
Fortunata. However, Severino, the predecessor of respondents, claimed in an
affidavit of self-adjudication that he is the sole, legal, and compulsory heir.
Consequently, he was able to appropriate to himself the properties. Thereafter,
Severino executed a deed of absolute sale over the said properties in favor of his
daughter, respondent Florentina Parocha. Moreover, petitioners alleged that
Severino used the same affidavit of self-adjudication to secure a free patent over
an agricultural land that had long been under the possession of Benito and
Florentina Pasag.

In denying the material allegations in the Complaint, respondents averred
in their Answer that the properties left behind by the spouses Pasag had already
been partitioned among their eight surviving children. They claimed that the
parcels of land are Bonifacio's share of which he later on renounced in a
Quitclaim Deed in favor of his brother, Severino. As regards another parcel of
land covered by respondents asserted that the held that petitioners failed to
prove their claim by a preponderance of evidence. said land had been in
Severino's possession and occupation since 1940, thus, giving him the right to
apply for and be granted a free patent over it. Having complied with the
requirements of law, Severino's title had now become indefeasible.

The trial of the case commenced, petitioners rested their case and was
granted ten days within which to submit their formal offer of documentary
exhibits. However they failed to submit the said pleading within the required
period. Petitioners asked for extension to submit their offer of evidence but
failed to submit and moved for another extension but still failed to submit.
Consequently, trial court deemed waived petitioners right to make their formal
offer of evidence. Petitioners moved for the admission of their offer of evidence
but the trial court denied. Petitioners appealed the case to the CA, which held
that petitioners failed to prove their claim by a preponderance of evidence.

Issue:
Whether or not CA erred in ruling that petitioners waived their right to
offer of documentary evidence.

Ruling:
The Rules of Court provides that the court shall consider no evidence which
has not been formally offered. A formal offer is necessary because judges are
mandated to rest their findings of facts and their judgment only and strictly upon
the evidence offered by the parties at the trial. Its function is to enable the trial
judge to know the purpose or purposes for which the proponent is presenting
the evidence. On the other hand, this allows opposing parties to examine the
evidence and object to its admissibility.

The Court ruled that the formal offer of one's evidence is deemed waived
after failing to submit it within a considerable period of time. Court cannot admit
an offer of evidence made after a lapse of three (3) months because to do so
would "condone an inexcusable laxity if not non-compliance with a court order
which, in effect, would encourage needless delays and derail the speedy
administration of justice."

The trial court had reasonable ground to consider that petitioners had
waived their right to make a formal offer of documentary or object evidence.
Despite several extensions of time to make their formal offer, petitioners failed
to comply with their commitment and allowed almost five months to lapse
before finally submitting it. Petitioners' failure to comply with the rule on
admissibility of evidence is anathema to the efficient, effective, and expeditious
dispensation of justice. Under the Rule on guidelines to be observed by trial
court judges and clerks of court in the conduct of pre-trial and case of deposition
and discovery measures, it is provided that: on the last hearing day allotted for
each party, he is required to make his formal offer of evidence after the
presentation of his last witness and the opposing party is required to
immediately interpose his objection thereto. Thereafter the judge shall make the
ruling on the offer of evidence in open court. However, the judge has the
discretion to allow the offer of evidence in writing.

On the other hand, Section 35 of Rule 132 of the Rules of Court provides
that "documentary and object evidence shall be offered after the presentation of
a party's testimonial evidence." It requires that "such offer shall be done orally
unless allowed by the Court to be done in writing."

The pre-trial guidelines and Sec. 35 of Rule 132 jointly considered, it is
made clear that the party who terminated the presentation of evidence must
make an oral offer of evidence on the very day the party presented the last
witness. Otherwise, the court may consider the party's documentary or object
evidence waived. While Sec. 35 of Rule 132 says that the trial court may allow
the offer to be done in writing, this can only be tolerated in extreme cases where
the object evidence or documents are large in number say from 100 and
above, and only where there is unusual difficulty in preparing the offer. HTDcCE

Both parties should obtain, gather, collate, and list all their respective
pieces of evidence whether testimonial, documentary, or object even prior
to the preliminary conference before the clerk of court or at the latest before the
scheduled pre-trial conference. Otherwise, pieces of evidence not identified or
marked during the pre-trial proceedings are deemed waived and rendered
inutile. The parties should strictly adhere to the principle of "laying one's cards
on the table." In the light of these issuances and in order to obviate interminable
delay in case processing, the parties and lawyers should closely conform to the
requirement that the offer of evidence must be done orally on the day scheduled
for the presentation of the last witness.

Trial court is bound to consider only the testimonial evidence presented
and exclude the documents not offered. Documents which may have been
identified and marked as exhibits during pre-trial or trial but which were not
formally offered in evidence cannot in any manner be treated as evidence.
Neither can such unrecognized proof be assigned any evidentiary weight and
value. It must be stressed that there is a significant distinction between
identification of documentary evidence and its formal offer. The former is done
in the course of the pre-trial, and trial is accompanied by the marking of the
evidence as an exhibit; while the latter is done only when the party rests its case.
The mere fact that a particular document is identified and marked as an exhibit
does not mean that it has already been offered as part of the evidence. It must be
emphasized that the party must formally offer any evidence that a party desires
to submit for the consideration of the court; otherwise, it is excluded and
rejected.


SALVADOR D. BRIBONERIA, petitioner, vs. THE HONORABLE COURT OF
APPEALS, GERTRUDES B. MAG-ISA, married to and assisted by PEDRO MAG-
ISA, respondents.

Facts:
Petitioner filed a complaint for Annulment of Document and Damages,
preliminary injunction against private respondent Gertrudes B. Mag-isa, with the
Regional Trial Court of Pasig, Plaintiff, together with his wife Nonita A.
Briboneria, are the registered owners (of) a parcel of land Among the
improvements on this parcel of land is plaintiff's residential house where his
wife and children used to stay until they migrated to the United States.

The abovementioned parcel of land was acquired and the residential house
was constructed through plaintiff's hard-earned salaries and benefits from his
employment abroad. Plaintiff was surprised to learn that his wife Nonita A.
Briboneria sold to defendant Gertrudis B. Mag-isa by means of a Deed of
Absolute Sale never authorized or empowered Nonita A. Briboneria or anybody
for or on his behalf, stead or representation to enter into any transaction
regarding the sale Plaintiff had all along been expecting that the house and lot
shall be for his family, particularly his children. Plaintiff was denied the use and
enjoyment of his properties since defendant Gertrudis B. Mag-isa had even
leased the premises to another who in turn had prohibited plaintiff from
entering the premises. Plaintiff suffered serious anxiety, fright, mental anguish
and wounded feelings and further subjected him to social humiliation and
embarrassment,

In due time, private respondent Gertrudes B. Mag-isa, as defendant, filed
her answer alleging as follows:

Defendants admit their circumstances as alleged in paragraph 1, the age of
plaintiff but deny the rest of the allegations therein for lack of knowledge and/or
information sufficient to form a judgment as to the truths thereof. petitioner
served on the private respondent Mag-isa a request for admission

On 10 November 1988, the private respondents filed with the court a quo
their Answer to Request for Admission, 5 alleging that most if not all the matters
subject of petitioner's request for admission had been admitted, denied and/or
clarified in their verified answer dated 20 June 1988, and that the other matters
not admitted, denied and/or clarified were either irrelevant or improper.

On 18 November 1988, petitioner filed a Motion for Summary Judgment,
claiming that the Answer to Request for Admission was filed by private
respondents beyond the ten (10) day period fixed in the request and that the
answer was not under oath; that, consequently the private respondents are
deemed to have admitted the material facts and documents subject of the
request for admission, pursuant to Section 2, Rule 26 of the Rules of Court.

On 28 December 1988, the trial court issued an order denying the
petitioner's motion for summary judgment. Petitioner moved for
reconsideration, which the court granted in its order, dated 20 July 1989, setting
aside the order of 28 December 1988. The private respondents, in turn, filed a
Motion for Clarification and Reconsideration, to which the petitioner filed an
opposition.

The petitioner thereupon filed with the Court of Appeals a petition for
certiorari, prohibition and mandamus to annul and set aside the order dated 1
February 1989 of the court a quo, alleging that the said order was issued with
grave abuse of discretion amounting to lack of jurisdiction. On 13 August 1990,
the Court of Appeals rendered a decision, 14 dismissing the petition. Petitioner's
motion for reconsideration having been likewise denied, he is now before us in
the present petition.

Issue:
Petitioner assails the respondent appellate court in holding that the
matters of fact and the documents requested to be admitted are mere
reiterations and/or reproductions of those alleged in the complaint. He claims
that the material facts and documents described in the request for admission are
relevant evidentiary matters supportive of his cause of action. He further argues
that the private respondents have impliedly admitted the material facts and
documents subject of the request for admission on account of their failure to
answer the request for admission within the period fixed therein, and for said
answer not being under oath.

Ruling:
The petition cannot be upheld; the petitioner's contentions are devoid of
merit.

To begin with, a cursory reading of the petitioner's complaint and his
request for admission clearly shows, as found by respondent appellate court,
that "the material matters and documents set forth in the request for admission
are the same as those set forth in the complaint which private respondents
either admitted or denied in their answer." 16 The respondent court therefore
correctly held that this case falls under the rule laid down in Po vs. Court of
Appeals. 17 wherein this Court held:

A party should not be compelled to admit matters of fact already admitted by
his pleading and concerning which there is no issue (Sherr vs. East, 71 A2d, 752,
terry 260, cited in 27 C.J.S. 91), nor should he be required to make a second denial
of those already denied in his answer to the complaint. A request for admission is
not intended to merely reproduce or reiterate the allegations of the requesting
party's pleading but should set forth relevant evidentiary matters of fact, or
documents described in and exhibited with the request, whose purpose is to
establish said party's cause of action or defense. . . .

Moreover, under Section 1, Rule 26 of the Rules of Court, 18 the request for
admission must be served directly upon the party; otherwise, the party to whom
the request is directed cannot be deemed to have admitted the genuineness of
any relevant document in and exhibited with the request or relevant matters of
fact set forth therein, on account of failure to answer the request for admission.

In the present case, it will be noted that the request for admission was not
served upon the private respondent Mag-isa but upon her counsel, Atty. Alfredo
A. Alto. Private respondent Mag-isa, therefore, cannot be deemed to have
admitted the facts and documents subject of the request for admission for having
failed to file her answer thereto within the period fixed in the request.

WHEREFORE, the petition should be, as it is hereby, DENIED


NESTLE PHILIPPINES, INC. and FRANCIS SANTOS, petitioners, vs. COURT OF
APPEALS and SPS. ROGELIO and ELIZA HEMEDEZ, respondents.

Facts:
Spouses Hemedez filed an action for damages against several persons for
the death of Dr. Vied Vemir Garcia Hemedez which happened in a dispersal
operation during a strike staged by the Union of Filipino Employees on account
of alleged unfair labor practices committed by Nestle Philippines, Inc.

The Hemedez spouses served the defendants a request for admission of the
truth of the facts set forth in their complaint and the genuineness of each of the
documents appended thereto. Through their respective counsel, defendants filed
their verified answer to the request for admission.
The Supreme Court held that there is no reason to strictly construe the
phrase "the party to whom the request is directed" to refer solely or personally
to the petitioners themselves. Moreover, as correctly observed by the lower
court, the subject matters of the request for admission are the same as the
ultimate facts alleged in the complaint for which the private respondents have
filed their respective answers. Private respondents desired the petitioners to
admit once again the very matters they had dealt with in their respective
answers.

Issue:
May the counsel of a party to whom a written request for admission is
addressed under Section 1, Rule 26 of the Rules of Court, answer such request
for his client?

Ruling:
Yes. THE PHRASE "THE PARTY TO WHOM THE REQUEST IS DIRECTED"
DOES NOT REFER PERSONALLY TO PETITIONERS IN CASE AT BAR. In the
case at bar, neither is there a showing that petitioners Nestle and Santos did not
authorize their respective counsel to file in0020their behalf the respective
answers requested of them by private respondents in the latter's written request
for admission.

As this Court has said, there is no reason to strictly construe the phrase
"the party to whom the request is directed" to refer solely or personally to the
petitioners themselves. Moreover, as correctly observed by the lower court, the
subject matters of the request for admission are the same as the ultimate facts
alleged in the complaint for which private respondents have filed their
respective answers. Private respondents thus desired the petitioners to admit
once again the very matters they had dealt with in their respective answers.

The application of the rules on modes of discovery rests upon the sound
discretion of the court. In the same vein, the determination of the sanction to be
imposed upon a party who fails to comply with the modes of discovery rests on
the same sound judicial discretion. It is the duty of the courts to examine
thoroughly the circumstances of each case and to determine the applicability of
the modes of discovery, bearing always in mind the aim to attain an expeditious
administration of justice. It need not be emphasized that upon the court's
shoulders likewise rests the burden of determining whether the response of the
requested party is a specific denial of the matters requested for admission.



FORTUNATA N. DUQUE, petitioner, vs. COURT OF APPEALS, SPS. ENRICO
BONIFACIO and DRA. EDNA BONIFACIO, respondents.

Facts:
Petitioner Duque filed a complaint before the RTC of Valenzuela alleging
that: respondents spouses Enrico and Edna Bonifacio negotiated with her certain
checks in exchange for cash in the total amount of Two Hundred Seventy
Thousand Pesos (P270,000.00); respondents represented themselves to be
holders in due course and for value and claimed that the checks were sufficiently
funded; upon presentation of the checks on their respective dates of maturity,
the same were dishonored; petitioner Duque gave notice of dishonor to the
respondents; and this notwithstanding and despite repeated demands,
respondents refused and continued to refuse to honor said checks or replace it
with cash.

Petitioner Valenzuela alleged the same circumstances in her complaint,
except that with her, the total amount involved is Four Hundred Thirty Two
Thousand Pesos (P432, 000.00).

In their Answers, the respondents spouses denied: having personally
negotiated with the plaintiffs any of the checks annexed to the complaints;
representing to both plaintiffs that they were holders in due course and for value
of said checks; representing that the same had sufficient funds; having drawn or
issued all the checks alluded to by plaintiffs; and refusing to honor the checks or
replace it with cash after being informed of the dishonor thereof.

Further, respondents contend that upon learning that the checks were
returned to the petitioners, they made arrangements for settlement but only for
the checks duly issued by them. Finally, respondents dispute the true amount of
their total liability to the respective petitioners as alleged in their separate
complaints, claiming that they do not owe that much to either of them.

On June 28, 1988, the RTC issued a pre-trial order defining the principal
issues, thus: "whether or not the defendants owe the plaintiffs the amount of
money as claimed in the complaint, and whether or not defendants can be
permitted to adduce evidence which would contradict the genuineness and due
execution of the actionable documents attached to the complaint; and setting
the cases for trial on the merits.

On November 22, 1988, petitioners filed a Request for Admission and
furnished to counsel for private respondents, specifically requesting that they
admit that:
1. They negotiated with plaintiffs for valuable consideration the checks
annexed to the respective complaints;
2. Defendant Edna M. Bonifacio signed separate promissory notes dated
November 23, 1987, acknowledging that she is indebted to plaintiff Duque in the
sum of Two Hundred Seventy Thousand Pesos (P270,000.00) and to plaintiff
Valenzuela Four Hundred Thirty Two Thousand Pesos (P432,000.00),
respectively; and
3. The plaintiffs in the two cases sent letters of demand to the defendants
both dated November 28, 1987 which the latter received on December 5, 1987.

For failure of the respondents spouses to respond to the aforementioned
request, the RTC, citing Sections 1 and 2, Rule 26 of the Rules of Court, issued an
Order on December 27, 1988, which reads in part: Defendants failure to deny
under oath the matters of which an admission is requested or setting forth in
detail the reason why he cannot truthfully admit/deny those matters in
accordance with the cited provisions of the Rules of Court is an implied
admission of the matters of which admission is requested. In the same Order,
the RTC deemed the cases submitted for decision. On February 1, 1989, the RTC
of Valenzuela rendered a decision against the private respondents.

Issues:
1. Whether or not the failure of the private respondents to respond to the
request for admission by the petitioners is tantamount to an implied admission
under Sections 1 and 2, Rule 26 of the Rules of Court.

2. Whether or not there was personal service of the request on private
respondents.

Ruling:
We find the petition devoid of merit.

This particular Rule seeks to obtain admissions from the adverse party
regarding the genuineness of relevant documents or relevant matters of fact
through requests for admissions to enable a party to discover the evidence of the
adverse side thereby facilitating an amicable settlement of the case or expediting
the trial of the same. However, if the request for admission only serves to delay
the proceeding by abetting redundancy in the pleadings, the intended purpose
for the rule will certainly be defeated.

The defendants, conspiring, confederating, aiding and helping each other,
negotiated with the plaintiff certain checks in exchange for cash. Clearly there
from, to require an admission on this point even though it was already denied in
the Answer would be superfluous.

As expounded by this Court in Po vs. Court of Appeals A party should not
be compelled to admit matters of fact already admitted by his pleading and
concerning which there is no issue (Sherr vs. East, 71 A2d, 752, Terry 260, cited
in 27 C.J.S. 91), nor should he be required to make a second denial of those
already denied in his answer to the complaint. A request for admission is not
intended to merely reproduce or reiterate the allegations of the requesting
partys pleading but should set forth relevant evidentiary matters of fact, or
documents described in and exhibited with the request, whose purpose is to
establish said partys cause of action or defense. Unless it serves that purpose, it
is, as correctly observed by the Court of Appeals, pointless, useless and a mere
redundancy.

The second issue involves the question of sufficiency of service on a party
of a request for admission. The petitioners claim that respondents were
personally served requests for admission as required by the Rules; and that
granting that they were not, service on the counsel would be sufficient. Records
show that only the counsel of the respondents, Atty. H.G. Domingo, Jr. was
furnished copies of the requests.

Consequently, the requests for admission made by the petitioners were not
validly served and therefore, private respondents cannot be deemed to have
admitted the truth of the matters upon which admissions were requested. Thus,
the summary judgment rendered by the RTC has no legal basis to support it.

WHEREFORE, we DENY the petition and AFFIRM the decision of the Court
of Appeals.


DEVELOPMENT BANK OF THE PHILIPPINES, VS HONORABLE COURT OF
APPEALS and ROSALINDA CANADALLA-GO, represented by her Attorney-in-
fact BENITO A. CANADALLA

Facts:
The controversy stemmed in January 1977 when Irene Canadalla obtained
a loan of P100, 000 from petitioner Development Bank of the Philippines (DBP)
for purposes of financing her piggery business. As security, Canadalla executed
on 19 January 1977 a Deed of Real Estate Mortgage over two parcels of land
covered by TCT No. T-7609 and OCT No. P-4226 of the Registry of Deeds of
Infanta, Quezon. On 10 August 1979, Canadalla procured another loan in the
amount of P150, 000, which was secured by a mortgage over the same two
parcels of land and a third parcel covered by OCT No. P-6679 of the Registry of
Deeds of the Province of Quezon.

Since the piggery business allegedly suffered strong reverses, compounded
by devastating typhoons, the prevalence of diseases, and destruction of her store
by fire, Canadalla failed to comply with her obligations to the DBP. Subsequently,
the DBP extra judicially foreclosed the mortgages. On 5 September 1989, the
mortgaged properties were sold at public auction to the DBP, which emerged as
the only bidder. The sale was evidenced by a Certificate of Sale and registered on
17 January 1990.

Canadalla was able to redeem the foreclosed property covered by TCT No.
T-7609 within the redemption period of one year from 17 January 1990. As to
the properties covered by OCT Nos. P-4226 and P-6679, she had six years from
17 January 1990 to redeem the same, they being free patent titles. On 5 October
1995, she offered to redeem the properties for a redemption price of P1.5
million. But the DBP countered that the redemption price under its 1986
Revised Chapter must be based on its total claim, which was P1, 927,729.50 as of
30 September 1995. Subsequently, she allegedly assigned her right to redeem
her properties to her daughter, herein private respondent Rosalinda A.
Canadalla-Go.

In January 1996, Go offered to redeem the properties for P526, 882.40. In
response, the DBP advised Go that the acceptable redemption price was P1,
814,700.58 representing its total claim as of 17 January 1996. When Go failed to
redeem the properties, the DBP consolidated its titles over the subject properties
and new certificates of title were issued in its name.

On 8 July 1996, Go filed with the Regional Trial Court (RTC) of Makati City a
Supplemental Complaint for the Exercise of Right of Redemption and
Determination of Redemption Price, Nullification of Consolidation, Annulment of
Titles, with Damages, Plus Injunction and Temporary Restraining Order. The
case was docketed as Civil Case No. 96-483 in Branch 148 of said court. After the
DBP filed its Answer, but before the parties could proceed to trial, Go filed a
Request for Admission by Adverse Party. Thereafter, the DBP filed its Comment.

During the hearing on 20 May 1997, Go objected to the Comment reasoning
that it was not under oath as required by Section 2, Rule 26 of the Rules of Court,
and that it failed to state the reasons for the admission or denial of matters for
which an admission was requested. For its part, the DBP manifested that, first,
the statements, allegations, and documents contained in the Request for
Admission are substantially the same as those in the Supplemental Complaint;
second, they had already been either specifically denied or admitted by the DBP
in its Answer; and third, the reasons for the denial or admission had already
been specifically stated therein.

On 9 June 1997, the RTC issued an Order granting the motion of Go to
consider as impliedly admitted the matters sought to be admitted in the Request
for Admission and all those denied by the DBP in its Comment.

Its motion for reconsideration having been denied, the DBP filed with the
Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 62142,
attributing to the court a quo grave abuse of discretion in granting the Request
for Admission despite the fact that (1) some of the matters assigned in the
Request for Admission had already been specifically denied in its Answer to the
Supplemental Complaint; (2) the sworn statement of Atty. Caraan had
sufficiently cured the alleged defect of the Comment; and (3) some of the matters
in the Request for Admission involved questions of law, conclusions of facts, and
matters of opinion which are improper subjects of such a request.

On 6 August 2001, the Court of Appeals dismissed the petition for lack of
merit. It held that since DBPs answer was not under oath, it could not be
considered as having substantially complied with the requirements of Section 2
of Rule 26 of the Rules of Court. The affidavit of Atty. Caraan, one of the legal
counsels of the DBP, failed to cure the defect because it was submitted after the
motion for the declaration of implied admission had been made and the hearing
of the same had been terminated.

The DBPs Motion for Reconsideration was denied by the Court of Appeals
in a Resolution dated 16 April 2002. Hence, the DBP is now before this Court by
way of certiorari under Rule 45 of the Rules of Court challenging the Decision
and Resolution of the Court of Appeals.

Issue:
Whether matters requested to be admitted under Rule 26 of the Rules of
Court which are mere reiterations of the allegations in the complaint and are
specifically denied in the answer may be deemed impliedly admitted on the
ground that the response thereto is not under oath.


Ruling:
We find for petitioner DBP.

Indeed, as pointed out by the DBP, the matters stated in Gos Request for
Admission are the same as those alleged in her Supplemental Complaint.
Besides, they had already been either specifically denied or admitted in DBPs
Answer to the Supplemental Complaint. To require the DBP to admit these
matters under Rule 26 of the Rules of Court would be pointless and superfluous.

We have held in Po v. Court of Appeal that [a] party should not be
compelled to admit matters of fact already admitted by his pleading and to
make a second denial of those already denied in his answer to the complaint.

The Po doctrine was brought a step further in Concrete Aggregates Co. v.
Court of Appeals, where we ruled that if the factual allegations in the complaint
are the very same allegations set forth in the request for admission and have
already been specifically denied or otherwise dealt with in the answer, a
response to the request is no longer required. It becomes, therefore, unnecessary
to dwell on the issue of the propriety of an unsworn response to the request for
admission. The reason is obvious. A request for admission that merely reiterates
the allegations in an earlier pleading is inappropriate under Rule 26 of the Rules
of Court, which, 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 the
pleading. Rule 26 does not refer to a mere reiteration of what has already been
alleged in the pleadings.

Hence, the DBP did not even have to file its Comment on Gos Request for
Admission, which merely reproduced the allegations in her complaint. DBPs
Answer itself controverts the averments in the complaint and those recopied in
the request for admission.

Under Section 1 of Rule 26 of the Rules of Court, the scope of matters that a
party may request the adversary to admit are (1) the genuineness of any
material and relevant document described in and exhibited with the request; and
(2) the truth of any material and relevant matter of fact set forth in the request.
The rule authorizing a party to call on the other party to make an admission
implies the making of demands for admission of relevant and material matters of
facts and not for admission of matters of law, conclusions, or opinions.


BAY VIEW HOTEL., INC., plaintiff-appellant, vs. KER & CO., LTD., and
PHOENIX ASSURANCE CO., LTD., defendant-appellees.

Facts:
In January, 1958, plaintiff-appellant Bay View Hotel, secured a fidelity
guarantee bond from defendant-appellee Ker & Co., Ltd., for its accountable
employees, against acts of fraud and dishonesty. Said defendant-appellees the
Philippine general agent of Phoenix Assurance Co., Ltd., a foreign corporation
duly licensed to do business in the Philippines. When one employee, a cashier,
was discovered by the plaintiff-appellant with a cash shortage and unremitted
collection totalling P42,490.95, it filed claims for payments on said fidelity
guarantee bond. Said claim was denied by the defendant-appellee, prompting
plaintiff-appellant to institute a civil case in the CFI to enforce it. Defendant-
appellee denied the claims contending that since it was a mere agent, it was not
liable under the policy. On June 22,1966, counsel for appellee filed a request for
admission of certain facts which appellant failed to answer.

Upon said failure to answer, defendant-appellee filed a motion to dismiss
the complaint on the ground that appellant was deemed to have impliedly
admitted the matters enumerated in the request for admission and claimed that
the proper party-in-interest against whom appellant has a claim was Phoenix,
who is the principal. Plaintiff-appellant amended the complaint to include
Phoenix. On August 1, 1966, defendants-appellees filed their joint answer to the
amended complaint. Phoenix argued, in said joint answer, that appellant was
deemed to have abandoned its claim as it did not seek arbitration thereof
pursuant to Condition No. 8 of the policy. On August 24, 1966, defendants-
appellees filed a motion for summary judgment and on November 4, 1966, CFI
granted said motion and dismissed the complaint.

Issue:
Did the lower court acted with grave abuse of discretion in extending the
effects of the request for admission to Phoenix who never filed a similar request;
in giving legal effects to a request for admission under the original and not the
amended complaint; in holding that the controversy requires arbitration; and in
finally dismissing the complaint?

Ruling:
The Supreme Court held that the legal effects of the request for admission
may not be altered by the mere amendment of a pleading; that the consequences
of the admission should favor respondent Phoenix as the same was secured by
its agent within the scope of and during the existence of the agency; that
Condition No. 8 which requires arbitration applies only in disputes regarding the
amount of the insurer's liability, but not as to any dispute as in the existence or
nonexistence thereof; that Ker & Co., Ltd., having acted merely as the agent of its
principal, Phoenix, only the case against it should rightfully be dismissed and the
case should be remanded to the court of origin for further proceedings and
determination on the merits.


SOLIDBANK CORPORATION, NOW KNOWN AS METROPOLITAN BANK AND
TRUST COMPANY, petitioner, vs. GATEWAY ELECTRONICS CORPORATION,
JAIME M. HIDALGO AND ISRAEL MADUCDOC, respondents.

Facts:
In May and June 1997, Gateway Electronics Corporation (Gateway)
obtained from Solid bank Corporation (Solid bank) four (4) foreign currency
denominated loans to be used as working capital for its manufacturing
operations. The loans were covered by promissory notes (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. To secure the loans covered by PN 97-375 and
PN 97-408, Gateway assigned to Solid bank 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 Solid bank 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 Solid bank. 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.

Gateway failed to comply with its loan obligations. By January 31, 2000,
Gateways outstanding debt amounted to US$1,975,835.58. Solid banks
numerous demands to pay were not heeded by Gateway. Thus, on February 21,
2000, Solid bank filed a Complaint9 for collection of sum of money against
Gateway.

On June 16, 2002, Solid bank filed an Amended Complaint 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 Guarantyto 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, Solid bank filed a Motion for Production and
Inspection of Documents 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.
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.

On April 30, 2001, Solid bank filed a motion for issuance of a show cause
order for Gateways failure to comply with the January 30, 2001 Order of the trial
court. 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, Solid banks counsel failed to appear on the said date. In the
manifestation, Gateway also expressed their willingness to make available for
inspection at Gateways offices any requested document.

Solid bank was not satisfied with the documents produced by Gateway.
Thus, on December 13, 2001, Solid bank 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. On April 15, 2002, the trial court issued an
Order 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. Gateway filed a partial motion for reconsideration
of the April 15, 2002 Order. However, the same was denied in an Order dated
August 27, 2002.

On November 5, 2002, Gateway filed a petition for certiorari before the
Court of Appeals (CA) seeking to nullify the Orders of the trial court. On June 2,
2004, the CA rendered a Decision nullifying the Orders of the trial court dated
April 15, 2002 and August 27, 2002.

Issues:
I. Whether Solid banks 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 Solid
banks claim.

Ruling:
We resolve to deny the petition.

The modes of discovery are accorded a broad and liberal treatment. 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.

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 therefore;

(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.

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.

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 29 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 Solid banks 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 Solid bank 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.


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.

Facts:
Spouses Agustin P. Uy and Pacita Tang Sioc Ten filed a petition for
injunction and damages with an application for the issuance of a temporary
restraining order and preliminary injunction against Security Bank Corporation
(SBC), Domingo Uy and the Sheriff of Quezon City. They sought to enjoin the
extra-judicial foreclosure of the Uy's property located in Quezon City. Both SBC
and Domindo P. Uy separately filed their answers with compulsory
counterclaims and cross-claims. SBC filed its answer to Domingo's cross-claim.
Before filing his answer to SBC's cross-claim, Domingo filed an Omnibus Motion
for the Production of Documents and Extension of Time to File Answer to Cross-
claim.
He wanted SBC to produce the documents, which was used in the
evaluation, processing and approval of the loans of Jackivi Trading Center, Inc.,
the real estate mortgages and the special power of attorney. These documents,
according to Domingo, must first be produced before he could prepare and file
the answer to SBC's cross-claim. Later, the spouses Uy also filed a similar motion
against SBC. SBC opposed both motions. The trial court, however, granted the
production and inspection of the documents. The Court of Appeals upheld the
ruling of the trial court.

Issue:
Whether the appellate court erred in affirming the grant of the two motions
for production and inspection of documents.

Ruling:
The Supreme Court found the arguments of petitioner as not persuasive.
Section 1, Rule 27 of the Rules of Court clearly provides that the documents
sought must be material to any matter involved in the action. Respondents
herein had shown that the subject documents were indeed material to the action
involved. Petition was denied and the assailed decision was affirmed.

Motion for production or inspection aims to enable the parties to inform
themselves of all relevant facts to the action. The Court discussed exhaustively
the significance of the various modes of discovery, an example of which is
Section 1, Rule 27 of the 1997 Rules of Court. 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."
As quoted: ". . . 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 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. . . . .'"

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. 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."



ROGER MANZANO, petitioner, vs. LUZ DESPABILADERAS, respondent.

Facts:
In 1989, during the months of August and September, respondent Luz
Despabiladeras obtained on credit from petitioner Roger Manzano various
construction materials which she used in her construction project at the
Camarines Sur Polytechnic Colleges (CSPC). By petitioners claim, he delivered to
respondent during above-said period a total of P307, 140.50 worth of
construction materials payable upon respondents initial collection from CSPC, to
bear 8% monthly interest until fully paid.

Respondent having paid the amount of only P130,000.00 exclusive of
interest, despite receipt of payments from CSPC, petitioner filed on April 6, 1990
a complaint against her for sum of money with damages a) P201,711.74 plus 8%
monthly interest thereon from September 20, 1989 until payment in full;

In her Answer with Counterclaim, respondent alleged that petitioner had
substantially altered the prices of the construction materials delivered to her;
and that in addition to the P130, 000.00 she had paid petitioner; she had made
additional payments to petitioner via two checks (one in the amount of P43,
069.00 and the other in the amount of P14, 000.00).

Petitioner filed his Reply and Answer to Counterclaim alleging, inter alia,
that the two checks represented payment for past obligations other than that
subject of the case.

As required by the trial court, petitioner filed a bond in the amount of P50,
000.00 to answer for any damages arising from the grant and enforcement of
suppliers lien. Issues having been joined, the case was set for pre-trial.

Instead of submitting "an offer to stipulate," petitioner filed on October 24,
1990 a "Request for Admission" asking respondent to admit within 15 days. No
response to the Request for Admission was proffered by respondent until in the
course of the trial of the case or on April 8, 1991, respondent filed a list of items
admitted to have been delivered and those not admitted, noting therein that
"Deliveries admitted do not bear the actual price agreed [upon] or the
specifications requested," which filing the trial court noted in its order of even
date.

Opposing the Motion for Partial Judgment and Execution, respondent
alleged: That the motion appears to have been based on the list of items on file
with the court which defendant admitted to have been delivered to her by
plaintiff but which, will still be litigated in order to determine the actual cost or
value as the delivery receipts did not contain or reflect the true agreement
between the parties or the cost does not appear on the receipt at the time of the
delivery of the items; Petitioner, by counsel, also admitted having received
P25,000.00 upon the expiration of respondents counter bond which was posted
for the dissolution of petitioners bond.

At the reception of evidence for the defense, respondent offered
documentary evidence including two cleared checks payable to petitioner, one
dated August 10, 1989 in the amount of P43, 069.00, and another dated August
12, 1989 in the amount of P14, 200.00. As reflected in petitioners Reply and
Answer to Counterclaim, the receipt of the checks was admitted but it was
claimed that they represented payment for previous accounts, not for
respondents account subject of the present case.

By Decision of July 7, 1997, the trial court found for petitioner.

x x x Despite receipt of said request for admission, defendant did not
answer the same, under oath, consequently, defendant is deemed to have
admitted that plaintiff delivered to her and she received the goods delivered
with the total value of P314,610.50 and that of the said total amount, she has
paid only P130,000.00.

There is no more need for the Court to examine and discuss the evidence
submitted by the plaintiff to prove the account of defendant because what has
been admitted need not be proved. Admission made by the parties in the
pleadings, or in the course of the trial or other proceedings do not require proof
and cannot be contradicted unless previously shown to have been made through
palpable mistake (Yu v. Magpayo, 44 SCRA 163). All proofs submitted by him
contrary thereto and inconsistent therewith should be ignored, whether or not
objection is interposed (Elayda v. Court of Appeals, 199 SCRA 349).

Plaintiff insists that there was an agreement between him and the
defendant for the latter to pay 8% monthly interests on the purchase on credit.
Defendant denied that there was such an agreement. According to the counsel
for plaintiff in his memorandum, it [is] just "a matter of ones word against the
others." Plaintiff did not present any written agreement as to payment of
interests. In the light of the defendants admission herein before explained, her
contention that her remaining balance is lesser than the amount being claimed
by plaintiff, is without merit. Defendants claim that she is not liable to pay the
8% monthly interests is correct, but she should have rendered payment of the
amount being claimed by the plaintiff minus the 8% monthly interest and if
plaintiff refuses to accept, consign the amount in Court.

Issue:
What is the legal consequence when a request for admission of material
and relevant facts pursuant to Rule 26 is not answered under oath within the
period stated in the Rules by a party litigant served therefore?

Ruling:
Petitioner contends that when respondent failed to deny under oath the
truth of the material facts subject of petitioners Request for Admission, she is
deemed to have admitted them that he delivered to her, and she received various
construction materials costing a total of P314, 610.50, P130, 000.00 of which had
been partially paid.

Petitioners arguments are impressed with merit.

The agreement of the parties during the pre-trial conference of October 2,
1990, as reflected in the pre-trial order of even date, was that "the [petitioner]
shall submit an offer to stipulate showing an itemized list of construction
materials delivered to the [respondent] together with the cost claimed by the
[petitioner] within fifteen (15) days[,] furnishing copy thereof to the
[respondent] who will state her objections if any, or comment there[o]n within
the same period of time." In substantial compliance with said agreement,
petitioner chose to instead file a request for admission, a remedy afforded by a
party under Rule 26.

The above-quoted Sections 1 and 2 of Rule 26 should not be disregarded, as
in fact the trial court did not, when it ordered respondent to file comment
thereon, just because the parties mutually agreed that petitioner submit "an offer
to stipulate."

WHEREFORE, the petition is hereby GRANTED.