G.R. No.

135874 January 25, 2000

SECURITY BANK CORPORATION, petitioner, vs. COURT OF APPEALS, SPOUSES AGUSTIN P. UY and PACITA TANG* SIOC TEN, DOMINGO UY, and Hon. PRUDENCIO A.
CASTILLO JR. in his capacity as presiding judge of the Quezon City RTC (Branch 220),respondents.

PANGANIBAN, J.:

Litigation should not be carried on in the dark. Courts are given great latitude in enabling the parties to inform themselves of all relevant facts, including those known
only to their adversaries. For this reason, the rules on discovery are accorded broad and liberal interpretation.

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

Also assailed by petitioner is the October 7, 1998 CA Resolution, which denied petitioner's Motion for Reconsideration.2

The Facts

The facts are summarized by the Court of Appeals (CA) in this wise:3

Petitioner Security Bank Corporation (SBC) is a domestic banking corporation duly organized and existing under Philippine laws. It is one of the defendants in
Civil Case No. Q-97-30330 entitled [S]pouses Agustin P.Uy and Pacita Tang Sioc Ten versus Security Bank Corporation, Domingo P. Uy and the Ex-Oficio City
Sheriff of Quezon City, for injunction and damages with an application for the issuance of a temporary restraining order and preliminary injunction.

Plaintiffs Spouses Agustin P. Uy and Pacita Tang Sioc Ten sought to enjoin Security Bank Corporation (SBC for brevity) and the Ex-Oficio Sheriff of Quezon City
from proceeding with the extra-judicial foreclosure of a mortgage over a piece of property registered under the respondent spouses' names located at
Cubao, Quezon City and covered by TCT No. RI-8731 (281736).

On February 25, 1997, a temporary restraining order was issued by Hon. Pedro M. Areola of the Regional Trial Court of Quezon City (Branch 85) where the
case was originally assigned. The temporary restraining order was lifted on April 8, 1997 when Judge Areola resolved to deny the spouses' application for a
preliminary injunction. This denial prompted the said plaintiffs to file a motion for the inhibition of Judge Areola from hearing the case, hence, the case was
re-raffled to Branch 220 presided over by respondent judge, Hon. Prudencio Altre Castillo, Jr.

On April 7, 1997, SBC filed its answer with compulsory counterclaim and cross-claim while defendant Domingo P. Uy filed on April 18, 1997 his answer with
compulsory counterclaim and cross-claim. SBC filed its answer to defendant Domingo Uy's cross-claim on April 28, 1997.

Before filing his answer to defendant SBC's cross-claim, defendant Domingo P. Uy filed an Omnibus Motion (Production of Documents and Suspension
and/or Extension of Time to File Answer to Cross-Claim) on the ground that all documents, papers and instruments made and executed by SBC on the
evaluation, processing and approval of the loans of Jackivi Trading Center, Inc., the real estate mortgages (REM) and the Special Power of Attorney (SPA)
themselves must first be produced before he [could] prepare and file the answer to SBC's cross-claim. SBC filed its opposition to the aforesaid motion of
Domingo Uy. In return defendant Domingo Uy filed a motion to admit reply with the reply attached and on June 3, 1997 SBC filed its rejoinder.1âwphi1.nêt

Acting on defendant Uy's Omnibus Motion (Production of Documents and Suspension and/or Extension of Time to File Answer to Cross-Claim) the trial court
issued an Order on June 25, 1997 denying the motion.

On July 16, 1997, Domingo P. Uy moved for the reconsideration of denial by filing an Omnibus Motion (Motion for Reconsideration and/or Extension of Time
to File Answer to Cross-Claim).

On the other hand, plaintiffs also filed their Motion (For Production, Inspection and Copying of Documents) praying for the issuance of an order directing
SBC to produce and allow them to inspect and copy the original and additional mortgage contracts executed by Jackivi Trading Center, Inc. and/or Jose
Tanyao. Defendant SBC opposed the motion on July 25, 1997 by filing its Consolidated Opposition to the spouses' Motion for Production, Inspection and
Copying of Documents and Urgent Motion for a temporary restraining order and a writ of preliminary injunction. Respondent spouses filed their reply to the
aforementioned consolidated opposition of SBC.

On August 3, 1997, SBC filed its opposition to respondent Domingo Uy's motion for reconsideration of the Order dated June 25, 1997.

On October 2, 1997, the trial court issued the first assailed Order, the dispositive portion of which states, thus:

WHEREFORE, premises considered, defendant Security Bank Corporation is hereby ordered to produce and permit defendant Domingo P. Uy to
inspect, copy or photograph the documents, papers and instruments made and executed on the evaluation, processing and approval of the loans
of Jackivi Trading Center, Inc., during usual business hours and day after at least three (3) days notice in advance by defendant Domingo P. Uy to
defendant Security Bank Corporation. However, the filing of the answer to cross-claim need not await the production of the documents.
Defendant Uy is given, for the last time, ten (10) days from receipt within which to file answer to the cross-claim of defendant Security Bank
Corporation, stating only the ultimate facts without including evidentiary matters.

Defendant Security Bank Corporation is hereby ordered to produce and permit plaintiff[s] to inspect, copy or photograph the original and
additional mortgage contracts executed by Jackivi Trading Center, Inc. and/or Mr. Jose Tanyao within which (sic) usual business hours and day
after at least three (3) days notice in advance by plaintiff to defendant Security Bank Corporation.

The application for issuance of temporary restraining order is hereby DENIED. In the meantime, set the case for hearing on the application for
issuance of writ of preliminary injunction on October 31, 1997, at 8:30 o'clock in the morning.

Furnish the parties and counsels with a copy of this Order.

SO ORDERED.

SBC filed a motion for partial reconsideration of the Order, claiming that said order [did] not explain the basis for requiring it to produce the requested
documents, and that there was no good cause for their production, hence, it cannot be compelled to produce the same.
 Acting on the aforesaid motion, respondent judge issued the second assailed Order on November 25, 1997 denying the Motion for Partial Reconsideration.

Ruling of the Court of Appeals

Affirming the trial court, the Court of Appeals held:4

It will be noted that the only condition imposed by the Rules is that the production of the documents must be for "good cause."

Contrary to the allegation of petitioner that respondent Domingo Uy ha[s] not shown good cause for the production of such documents, said respondent has
sufficiently shown the good cause on which his motion is anchored [—] that of being able to intelligently prepare his defenses against the cross-claim of
petitioner SBC.

On the other hand, the motion for production filed by the respondents spouses Uy and Pacita Tang Sioc Ten is likewise for good cause, it being necessary for
a full determination of the issues raised in Civil Case No. Q-97- 30330.

"Good cause" does not relate to the substance in the document but to the reason for producing relevant or material matters therein; so that the
enforcement of the rule entails exercise of sound discretion. The burden is on the moving party to demonstrate the need for the documents sought beyond
the relevancy or materiality of the evidence therein.

Hence, this Petition.5

The Issue

In its Memorandum, petitioner submits this lone issue for the consideration of the Court:6

Whether or not the Honorable Court of Appeals committed grave abuse of discretion 7 when it sustained the Orders of the Respondent Regional Trial Court
dated 02 October 1997 and 25 November 1997 which granted the respective Motions [For Production, Inspection and Copying of Documents] of
Respondents Spouses Agustin P. Uy and Pacita Tang Sioc Ten and Domingo Uy.

In the main, the Court is being asked to determine whether the appellate court erred in affirming the grant of the two Motions for production and inspection of
documents.

The Court's Ruling - The Petition is bereft of merit.

Main Issue: - Grant of Motions for Production and Inspection of Documents

Petitioner Security Bank Corporation (SBC) maintains that, in sustaining the grant of the Motions for production, inspection and copying of documents filed by private
respondents, the CA grossly misconstrued and misapplied Section 1, Rule 27 of the Rules of Court. Petitioner stresses that the CA erred in focusing only on the
requirement of "good cause" and in ignoring the prerequisite of relevancy.

Moreover, petitioner contests the "good cause" invoked by the CA. Specifically, it contends that the "good cause," which Respondent Domingo Uy relied upon to be
able to prepare an answer to the cross-claim against him, was negated by the rulings of both the trial court and the CA requiring him to file such answer without
awaiting the production of the documents sought.

We disagree with petitioner. Section 1, Rule 27 of the 1997 Rules of Court provides:

Sec. 1. Motion for production or inspection; order. — Upon motion of any party showing good cause therefor, the court in which an action is pending may (a)
order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents,
papers, books, accounts, letters, photographs, objects or tangible things not privileged, which constitute or contain evidence material to any matter involved
in the action and which are in his possession, custody or control; or (b) order any party to permit entry upon designated land or other property in his
possession or control for the purpose of inspecting, measuring, surveying, or photographing the property or any designated relevant object or operation
thereon. The order shall specify the time, place and manner of making the inspection and taking copies and photographs, and may prescribe such terms and
conditions as are just.

In Republic v. Sandiganbayan,8 the Court discussed exhaustively the significance of the various modes of discovery, an example of which is the aforecited provision. In
sum, the Court held that the said Rule aims to enable the parties to inform themselves, even before the trial, of all the facts relevant to the action, including those
known only to the other litigants. Through this procedure, "civil trials should not be carried on in the dark." We quote:

. . . Indeed, it is the purpose and policy of the law that the parties — before the trial if not indeed even before the pre-trial — should discover or inform
themselves of all the facts relevant to the action, not only those known to them individually, but also those known to their adversaries; in other words,
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. . . .9

In the present case, the CA did not err in affirming the trial court ruling that there was "good cause" for the grant of the Motions for inspection of documents. The
latter's holding that the documents were not indispensable to the preparation of the answer of Uy to the cross-claim did not militate against respondents' availment of
this important mode of discovery. As he himself averred in his Motion, the subject documents were "material and important to the issues raised in the case in general,
and as between defendant and SBC in particular."10

Verily, the CA noted that the documents would enable Respondent Uy to "intelligently prepare his defenses against the cross-claim of petitioner SBC,"11 and not merely
to formulate his answer. Likewise, we agree with the appellate court that the Motion of Spouses Agustin Uy and Pacita Tang Sioc Ten was for a good cause, because the
said documents were "necessary for a determination of the issues raised in Civil Case No. Q-97-30330."12

Indeed, litigation is essentially an abiding quest for truth undertaken not by the judge alone, nut jointly with the parties. Litigants, therefore, must welcome every
opportunity to achieve goal; they must act in good faith to reveal documents, papers and other pieces of evidence material to the controversy. In Alonzo
v. Villamor,13 the Court ruled:

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys
the other. It is, rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly
trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done on the merits. Lawsuits, unlike duels, are not to be
won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant
consideration from courts. There should be no vested right in technicalities. . . .

Materiality of the Subject Documents

Petitioner points out that a party may be compelled to produce or allow the inspection of documents if six procedural requisites are complied with, viz.:

(a) The party must file a motion for the production or inspection of documents or things, showing good cause therefor;

(b) Notice of the motion must be served to all other parties of the case;

(c) The motion must designate the documents, papers, books, accounts, letters, photographs, objects or tangible things which the party wishes to be
produced and inspected;

(d) Such documents, etc. are not privileged;

(e) Such documents, etc. constitute or contain evidence material to any matter involved in the action; and

(f) Such documents, etc. are in the possession, custody or control of the other party.14

Petitioner contends that Requisite "e" has not been satisfied, arguing that respondents have not shown the relevancy or materiality of the documents subject of the
Motions. Specifically, it maintains that the documents sought by Spouses Uy and Tang Sioc Ten — "the original and additional mortgage contracts executed by Jackivi
Trading Center, Inc.15 and/or Mr. Jose Tanyao"16 — were not relevant to Civil Case Q-97-30330, which was for the declaration of the nullify of the January 27, 1993 and
August 16, 1995 Real Estate Mortgages between Jackivi and petitioner. The existence or the absence of other mortgages executed by Jackivi, petitioner insists, has
absolutely no bearing on the said case, because it does not in any way determine the validity or the invalidity of the subject Real Estate Mortgages.

Petitioner also argues that the documents sought by Respondent Domingo Uy — "all the documents, papers and instruments made and executed by [Petitioner] SBC in
the evaluation, processing and approval of the loans to Jackivi . . .17 — were not relevant, because the trial court itself ruled that he could prepare his answer to the
cross-claim without those documents.

These arguments are not persuasive. Section 1 of Rule 27 clearly provides that the documents sought must be "material to any matter involved in the action."
Respondents have shown that the subject documents are indeed material to the present action.

Indeed, the factual backdrop of the case strengthens respondent's cause. The civil action instituted by the Spouses Uy sought the annulment of two deeds of Real
Estate Mortgage between Jackivi and petitioner. They allegedly issued a Special Power of Attorney to Respondent Uy to mortgage their property only for their benefit,
not for that Jackivi. Because he mortgaged the property as security for Jackivi's loan, they contend that he exceeded his authority and that the contracts of real estate
mortgage were consequently invalid. Petitioner, on the other hand, filed a cross-claim against him, because it "relied on the representations and documents submitted
by [the latter] that he was duly authorized to mortgage the subject property."18

In this light, the relevance of the documents sought by Respondent Domingo Uy is readily apparent. The papers executed by the petitioner bank in evaluating and
processing the real estate mortgage are manifestly useful in his defense against its cross-claim. The trial court's ruling that he could file his answer without examining
those documents does not prove that they are immaterial to the present action. The CA has held that those documents would enable him to "intelligently prepare his
defenses against the cross-claim of Petitioner SBC.

So also, the additional mortgage contracts executed by Jackivi are material to the present action. Because a witness of petitioner admitted in court that there was a
third mortgage contract between Jackivi and the bank, fair play demands that herein respondents must be given the chance to examine such additional mortgage
contracts. In so doing, they can determine why petitioner was going after their property which was invalidly mortgaged by Respondent Uy, while the properties of the
actual borrower, Jackivi, have not been touched or foreclosed by the bank.

Indeed, the rule is that courts, in passing upon a motion for discovery, should be liberal in determining whether the documents in question are relevant to the subject
matter of the action.19 To repeat, the rule on discovery "requires the parties to play the game with cards on the table so that the possibility of fair settlement before
trial is measurably increased."20

All in all, petitioner failed to show any reversible error on the party of the Court of Appeals. The Motions of respondents were for a good cause, and the documents
sought were material to the action pending before the trial court. WHEREFORE, the Petition is DENIED and the assailed Decision is AFFIRMED. Costs against petitioner.
G.R. No. 90478 November 21, 1991

REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT), petitioner,

vs.
SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and DOMINADOR R. SANTIAGO, respondents.

NARVASA, J.:

Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago — together with Ferdinand E. Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria
R. Tantoco, and Maria Lourdes Tantoco-Pineda-are defendants in Civil Case No. 0008 of the Sandiganbayan. The case was commenced on July 21, 1987 by the
Presidential Commission on Good Government (PCGG) in behalf of the Republic of the Philippines. The complaint which initiated the action was denominated one "for
reconveyance, reversion, accounting, restitution and damages," and was avowedly filed pursuant to Executive Order No. 14 of President Corazon C. Aquino.

After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer, jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE
COMPLAINT AND FOR BILL OF PARTICULARS OF OTHER PORTIONS" dated Nov. 3, 1987. 1 The PCGG filed an opposition thereto, 2 and the movants, a reply to the
opposition. 3 By order dated January 29, 1988, the Sandiganbayan, in order to expedite proceedings and accommodate the defendants, gave the PCGG forty-five (45)
days to expand its complaint to make more specific certain allegations. 4

Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of the Rules of Court" dated February 1, 1988, and "Interrogatories under Rule 25." 5Basically,
they sought an answer to the question: "Who
were the Commissioners of the PCGG (aside from its Chairman, Hon. Ramon Diaz, who verified the complaint) who approved or authorized the inclusion of Messrs.
Bienvenido R. Tantoco, Jr. and Dominador R. Santiago as defendants in the . . case?" 6 The PCGG responded by filing a motion dated February 9, 1988 to strike out said
motion and interrogatories as being impertinent, "queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is improper, impertinent and
irrelevant under any
guise." 7

On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an Expanded Complaint. 8 As this expanded complaint, Tantoco and Santiago reiterated their motion for bill of particulars,
through a Manifestation dated April 11, 1988. 9

Afterwards, by Resolution dated July 4, 1988, 10

the Sandiganbayan denied the motion to strike out, for bill of particulars, and for leave to file interrogatories, holding them to be without
legal and factual basis. Also denied was the PCGG's motion to strike out impertinent pleading dated February 9, 1988. The Sandiganbayan declared inter alia the
complaint to be "sufficiently definite and clear enough," there are adequate allegations . . which clearly portray the supposed involvement and/or alleged participation
of defendants-movants in the transactions described in detail in said Complaint," and "the other matters sought for particularization are evidentiary in nature which
should be ventilated in the pre-trial or trial proper . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave of court is premature . .
(absent) any special or extraordinary circumstances . . which would justify . . (the same)."

Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18, 1988. 11 In response, the PCGG presented a "Reply to Answer with
Motion to Dismiss Compulsory Counterclaim " 12

The case was set for pre-trial on July 31, 1989. 13

On July 25, 1989, the PCGG submitted its PRE-TRIAL. 14 The pre-trial was however reset to September 11, 1989, and all other parties
were required to submit pre-trial briefs on or before that date. 15

On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated "Interrogatories to Plaintiff," 16 and on August 2, 1989, an "Amended Interrogatories to Plaintiff"' 17 as well as a Motion
for Production and Inspection of Documents. 18

The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's amended complaint, through such questions, for instance, as—

1. In connection with the allegations . . in paragraph 1 . ., what specific property or properties does the plaintiff claim it has the right to recover from defendants Tantoco, Jr. and Santiago for being ill-gotten?

3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . . were committed by defendants Tantoco, Jr. and Santiago in "concert with" defendant Ferdinand Marcos and in furtherance or pursuit, of the alleged systematic
plan of said defendant Marcos to accumulate ill-gotten wealth?"

5. In connection with . . paragraph 13 . ., what specific act or acts of the defendants Tantoco, Jr. and Santiago. . were committed by said defendants as part, or in furtherance, of the alleged plan to conceal assets of defendants Ferdinand and Imelda
Marcos?

7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case that Tourist Duty Free Shops, Inc., including all the assets of said corporation, are beneficially owned by either or both defendants Ferdinand and Imelda Marcos and
that the defendants Tantoco, Jr. and Santiago, as well as, the other stockholders of record of the same corporation are mere "dummies" of said defendants Ferdinand and /or Imelda R. Marcos?

On the other hand, the motion for production and inspection of documents prayed for examination and copying of—

1) the "official records and other evidence" on the basis of which the verification of the Amended Complaint asserted that the allegations thereof are "true and correct;"

2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and . . marked as exhibits for the plaintiff;" and

3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and the decision (of the Chairman and members) to file the complaint" in the case at bar.

By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the Amended Interrogatories and granted the motion for production and inspection of documents (production being scheduled on September 14 and 15, 1989), respectively.

On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989 (allowing production and inspection of documents). It argued that

1) since the documents subject thereof would be marked as exhibits during the pre-trial on September 11, 1989 anyway, the order for "their production and inspection on September 14 and 15, are purposeless and unnecessary;"

2) movants already know of the existence and contents of the document which "are clearly described . . (in) plaintiff's Pre-Trial Brief;"

3) the documents are "privileged in character" since they are intended to be used against the PCGG and/or its Commissioners in violation of Section 4, Executive Order No. 1, viz.:
 (a) No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this Order.

(b) No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative, or administrative proceeding concerning matters within its official cognizance.

It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19

which the Sandiganbayan treated as a motion for reconsideration of the Resolution of August 21, 1989 (admitting
the Amended Interrogatories). The opposition alleged that —

1) the interrogatories "are not specific and do not name the person to whom they are propounded . .," or "who in the PCGG, in particular, . . (should) answer the
interrogatories;"

2) the interrogatories delve into "factual matters which had already been decreed . . as part of the proof of the Complaint upon trial . .;"

3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which defendants . . sought to . . (extract) through their aborted Motion for Bill of
Particulars;"

4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and irregularly utilized . . (since) the order of trial calls for plaintiff to first
present its evidence."

Tantoco and Santiago filed a reply and opposition on September 18, 1989.

After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first, denying reconsideration (of the Resolution allowing production of
documents), and the second, reiterating by implication the permission to serve the amended interrogatories on the plaintiff (PCGG). 20

Hence, this petition for certiorari.

The PCGG contends that said orders, both dated September 29, 1989, should be nullified because rendered with grave abuse of discretion amounting to excess of jurisdiction. More particularly, it claims —

a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:

1) that said interrogatories are not specific and do not name the particular individuals to whom they are propounded, being addressed only to the PCGG;

2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying the movants' motion for bill of particulars) had already declared to be part of the PCGG's proof upon trial; and

3) that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related issuances; and

b) as regards the order granting the motion for production of documents:

1) that movants had not shown any good cause therefor;

2) that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's exhibits, and the movants had viewed, scrutinized and even offered objections thereto and made comments
thereon; and

3) that the other documents sought to be produced are either —

(a) privileged in character or confidential in nature and their use is proscribed by the immunity provisions of Executive Order No. 1, or

(b) non-existent, or mere products of the movants' suspicion and fear.

This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan to desist from enforcing its questioned resolutions of September 29, 1989 in Civil Case No. 0008. 21

After the issues were delineated and argued at no little length by the parties, the Solicitor General withdrew "as counsel for plaintiff . . with the reservation, however, conformably with Presidential Decree No. 478, the provisions of Executive Order No.
292, as well as the decisional law of 'Orbos v. Civil Service Commission, et al.,' (G.R. No. 92561, September 12, 1990) 22
to submit his comment/observation on incidents/matters pending with this . .
Court if called for by circumstances in the interest of the Government or if he is so required by the Court." 23 This, the Court allowed by Resolution dated
January 21, 1991. 24

Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which the Solicitor General had withdrawn would henceforth be under his (Maceren's) charge "and/or any of the following private attorneys: Eliseo B.
Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other attorneys as it may later authorize." 25

The facts not being in dispute, and it appearing that the parties have fully ventilated their respective positions, the Court now proceeds to decide the case.

Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court: interrogatories to parties , 26
and production and inspection of documents and things. 27 Now, it
appears to the Court that among far too many lawyers (and not a few judges), there is, if not a regrettable unfamiliarity and even outright ignorance about
the nature, purposes and operation of the modes of discovery, at least a strong yet unreasoned and unreasonable disinclination to resort to them — which
is a great pity for the intelligent and adequate use of the deposition-discovery mechanism, coupled with pre-trial procedure, could, as the experience of
other jurisdictions convincingly demonstrates, effectively shorten the period of litigation and speed up adjudication. 28 Hence, a few words about these
remedies is not at all inappropriate.

The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential function is accomplished by first, the ascertainment of all the
material and relevant facts from the pleadings and from the evidence adduced by the parties, and second, after that determination of the facts has been
completed, by the application of the law thereto to the end that the controversy may be settled authoritatively, definitely and finally.

It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied with assuring that all the facts are indeed presented to the
Court; for obviously, to the extent that adjudication is made on the basis of incomplete facts, to that extent there is faultiness in the approximation of
objective justice. It is thus the obligation of lawyers no less than of judges to see that this objective is attained; that is to say, that there no suppression,
obscuration, misrepresentation or distortion of the facts; and that no party be unaware of any fact material a relevant to the action, or surprised by any
factual detail suddenly brought to his attention during the trial. 29

Seventy-one years ago, in Alonso v. Villamor, 30

this Court described the nature and object of litigation and in the process laid down the standards by which judicial contests
are to be conducted in this jurisdiction. It said:

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and
destroys the other. It is, rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then brushing
aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done on the merits. Lawsuits,
unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great
hindrance and chief enemy, deserves scant consideration from courts. There should be no vested right in technicalities. . . .

The message is plain. It is the duty of each contending party to lay before the court the facts in issue-fully and fairly; i.e., to present to the court all the
material and relevant facts known to him, suppressing or concealing nothing, nor preventing another party, by clever and adroit manipulation of the
technical rules of pleading and evidence, from also presenting all the facts within his knowledge.

Initially, that undertaking of laying the facts before the court is accomplished by the pleadings filed by the parties; but that, only in a very general way. Only
"ultimate facts" are set forth in the pleadings; hence, only the barest outline of the facfual basis of a party's claims or defenses is limned in his pleadings. The
law says that every pleading "shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party
pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts." 31

Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too generally or "not averred with sufficient definiteness or particularity to enable . . (an adverse party) properly to prepare his responsive pleading or to prepare for
trial," a bill of particulars seeking a "more definite statement" may be ordered by the court on motion of a party. The office of a bill of particulars is, however, limited to making more particular or definite the ultimate facts in a pleading It is not its office
to supply evidentiary matters. And the common perception is that said evidentiary details are made known to the parties and the court only during the trial, when proof is adduced on the issues of fact arising from the pleadings.

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties — before the trial if not indeed even before the pre-trial — should discover or inform
themselves of all the facts relevant to the action, not only those known to them individually, but also those known to adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this
ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample discovery before trial, under proper regulation, accomplished one of the most necessary of modern
procedure: it not only eliminates unessential issue from trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. .
." 32

As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the
pleadings.

The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those
issues. The evident purpose is, to repeat, to enable parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before trials and thus prevent that said trials are carried on in the dark. 33

To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as a witness to testify orally at trial. The inquiry extends to all facts which are relevant, whether they be ultimate
or evidentiary, excepting only those matters which are privileged. The objective is as much to give every party the fullest possible information of all the relevant facts before the trial as to obtain evidence for use upon said trial. The principle is reflected
in Section 2, Rule 24 (governing depositions) 34 which generally allows the examination of a deponent —

1) "regarding any matter, not privileged, which is relevant to the subject of the pending action, whether relating to the claim or defense of any
other party;"

2) as well as:

(a) "the existence, description, nature, custody, condition and location of any books, documents, or other tangible things" and

(b) "the identity and location of persons having knowledge of relevant facts."

What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of
persons having knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any
books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the
time-honored cry of "fishing expedition" serve to preclude a party from inquiring into the facts underlying his opponent's case. Mutual knowledge of all the
relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in
his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period
preceding it, thus reducing the possibility, of surprise, . . . 35
In line with this principle of according liberal treatment to the deposition-discovery mechanism, such modes of discovery as (a) depositions (whether by oral examination or written interrogatories) under Rule 24, (b) interrogatories to parties under
Rule 25, and (c) requests for admissions under Rule 26, may be availed of without leave of court, and generally, without court intervention. The Rules of Court explicitly provide that leave of court is not necessary to avail of said modes of discovery
after an answer to the complaint has been served. 36
It is only when an answer has not yet been filed (but after jurisdiction has been obtained over the defendant or property
subject of the action) that prior leave of court is needed to avail of these modes of discovery, the reason being that at that time the issues are not yet joined
and the disputed facts are not clear. 37

On the other hand, leave of court is required as regards discovery by (a) production or inspection of documents or things in accordance with Rule 27, or (b) physical and mental examination of persons under Rule 28, which may be granted upon due
application and a showing of due cause.

To ensure that availment of the modes of discovery is otherwise untrammeled and efficacious, the law imposes serious sanctions on the party who refuses to make discovery, such as dismissing the action or proceeding or part thereof, or rendering
judgment by default against the disobedient party; contempt of court, or arrest of the party or agent of the party; payment of the amount of reasonable expenses incurred in obtaining a court order to compel discovery; taking the matters inquired into
as established in accordance with the claim of the party seeking discovery; refusal to allow the disobedient party support or oppose designated claims or defenses; striking out pleadings or parts thereof; staying further proceedings. 38

Of course, there are limitations to discovery, even when permitted to be undertaken without leave and without judicial intervention. "As indicated by (the) Rules . . ., limitations inevitably arise when it can be shown that the examination is being
conducted in bad faith or in such a manner as to annoy, embarass, or oppress the person subject to the inquiry. 39 And . . . further limitations come into existence when the inquiry touches upon the
irrelevant or encroaches upon the recognized domains of privilege." 40

In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law.

It is in light of these broad principles underlying the deposition-discovery mechanism, in relation of course to the particular rules directly involved, that the issues in this case will now be resolved.

The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules of Court cannot be sustained.

It should initially be pointed out — as regards the private respondents "Motion for Leave to File Interrogatories" dated February 1, 1988 41
— that it was correct for them to seek leave to serve interrogatories,
because discovery was being availed of 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." 42 But there was no need for the private respondents to seek such leave to serve their
"Amended Interrogatories to Plaintiff" (dated August 2, 1989 43) after they had filed their answer to the PCGG's complaint, just as there was no need for the
Sandiganbayan to act thereon.

1. The petitioner's first contention — that the interrogatories in question are defective because they (a) do not name the particular individuals to whom they
are propounded, being addressed only to the PCGG, and (b) are "fundamentally the same matters . . (private respondents) sought to be clarified through
their aborted Motion . . for Bill of Particulars" — are untenable and quickly disposed of.

The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if the party served with interrogatories is a juridical
entity such as "a public or private corporation or a partnership or association," the same shall be "answered . . by any officer thereof competent to testify in
its behalf." There is absolutely no reason why this proposition should not be applied by analogy to the interrogatories served on the PCGG. That the
interrogatories are addressed only to the PCGG, without naming any specific commissioner o officer thereof, is utterly of no consequence, and may not be
invoked as a reason to refuse to answer. As the rule states, the interrogatories shall be answered "by any officer thereof competent to testify in its behalf."

That the matters on which discovery is desired are the same matters subject of a prior motion for bill of particulars addressed to the PCGG's amended
complaint — and denied for lack of merit — is beside the point. Indeed, as already pointed out above, a bill of particulars may elicit only ultimate facts, not
so-called evidentiary facts. The latter are without doubt proper subject of discovery. 44

Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at them disproves the argument. The interrogatories are made to relate to individual paragraphs of the PCGG's expanded complaint and inquire
about details of the ultimate facts therein alleged. What the PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of relevancy, or privilege, or that the inquiries are being made in bad faith, or simply to
embarass or oppress it. 45 But until such an objection is presented and sustained, the obligation to answer subsists.

2. That the interrogatories deal with factual matters which will be part of the PCGG's proof upon trial, is not ground for suppressing them either. As already
pointed out, it is the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all parties even before trial, this being
deemed essential to proper litigation. This is why either party may compel the other to disgorge whatever facts he has in his possession; and the stage at
which disclosure of evidence is made is advanced from the time of trial to the period preceding it.

3. Also unmeritorious is the objection that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order
No. 14 and related issuances. In the first place, there is nothing at all wrong in a party's making his adversary his witness . 46 This is expressly allowed by
Section 6, Rule 132 of the Rules of Court, viz.:

Sec. 6. Direct examination of unwilling or hostile witnesses. — A party may . . . call an adverse party or an officer, director, or managing agent of a
public or private corporation or of a partnership or association which is an adverse party, and interrogate him by leading questions and contradict
and impeach him in all respects as if he had been called by the adverse party, and the witness thus called may be contradicted and impeached by
or on behalf of the adverse party also, and may be cross-examined by the adverse party only upon the subject-matter of his examination in chief.

The PCGG insinuates that the private respondents are engaged on a "fishing expedition," apart from the fact that the information sought is immaterial since
they are evidently meant to establish a claim against PCGG officers who are not parties to the action. It suffices to point out that "fishing expeditions" are
precisely permitted through the modes of discovery. 47 Moreover, a defendant who files a counterclaim against the plaintiff is allowed by the Rules to
implead persons (therefore strangers to the action) as additional defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the
Rules, to wit:

Sec. 14. Bringing new parties. — When the presence of parties other than those to the original action is required for the granting of complete
relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if jurisdiction over them
can be obtained."
The PCGG's assertion that it or its members are not amenable to any civil action "for anything done or omitted in the discharge of the task contemplated by .
. (Executive) Order (No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of facto relevant to the action and which are not self-
incriminatory or otherwise privileged is one thing; the matter of whether or not liability may arise from the facts disclosed in light of Executive Order
No. 1, is another. No doubt, the latter proposition may properly be set up by way of defense in the action.

The apprehension has been expressed that the answers to the interrogatories may be utilized as foundation for a counterclaim against the PCGG or its
members and officers. They will be. The private respondents have made no secret that this is in fact their intention. Withal, the Court is unable to uphold the
proposition that while the PCGG obviously feels itself at liberty to bring actions on the basis of its study and appreciation of the evidence in its possession,
the parties sued should not be free to file counterclaims in the same actions against the PCGG or its officers for gross neglect or ignorance, if not downright
bad faith or malice in the commencement or initiation of such judicial proceedings, or that in the actions that it may bring, the PCGG may opt not to be
bound by rule applicable to the parties it has sued, e.g., the rules of discovery.

So, too, the PCGG's postulation that none of its members may be "required to testify or produce evidence in any judicial . . proceeding concerning matters
within its official cognizance," has no application to a judicial proceeding it has itself initiated. As just suggested, the act of bringing suit must entail a waiver
of the exemption from giving evidence; by bringing suit it brings itself within the operation and scope of all the rules governing civil actions, including the
rights and duties under the rules of discovery. Otherwise, the absurd would have to be conceded, that while the parties it has impleaded as defendants may
be required to "disgorge all the facts" within their knowledge and in their possession, it may not itself be subject to a like compulsion.

The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued without its consent. But it is axiomatic that in filing an action, it
divests itself of its sovereign character and sheds its immunity from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or
preferred status to the State, even while assuming to represent or act for the State. 48

The suggestion 49
that the State makes no implied waiver of immunity by filing suit except when in so doing it acts in, or in matters concerning, its proprietary or
non-governmental capacity, is unacceptable; it attempts a distinction without support in principle or precedent. On the contrary —

The consent of the State to be sued may be given expressly or impliedly. Express consent may be manifested either through a general law or a
special law. Implied consent is given when the State itself commences litigation or when it enters into a contract. 50

The immunity of the State from suits does not deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to private litigants. In short, by taking the initiative
in an action against the private parties, the state surrenders its privileged position and comes down to the level of the defendant. The latter automatically acquires, within certain limits, the right to set up whatever claims and other
defenses he might have against the state. . . . (Sinco, Philippine Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 L. ed. 899)" 51

It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held that where private property has been taken in
expropriation without just compensation being paid, the defense of immunity from suit cannot be set up by the State against an action for payment by the owner. 52

The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the Sandiganbayan's Order for the production and inspection of specified documents and things allegedly in its possession.

The Court gives short shrift to the argument that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's exhibits, the movants having in fact viewed, scrutinized and even
offered objections thereto and made comments thereon. Obviously, there is nothing secret or confidential about these documents. No serious objection can therefore be presented to the desire of the private respondents to have copies of those
documents in order to study them some more or otherwise use them during the trial for any purpose allowed by law.

The PCGG says that some of the documents are non-existent. This it can allege in response to the corresponding question in the interrogatories, and it will incur no sanction for doing so unless it is subsequently established that the denial is false.

The claim that use of the documents is proscribed by Executive Order No. 1 has already been dealt with. The PCGG is however at liberty to allege and prove that said documents fall within some other privilege, constitutional or statutory.

The Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and inspection of the documents subject of the motion dated August 3, 1989. 53
Some of the documents are, according to
the verification of the amended complaint, the basis of several of the material allegations of said complaint. Others, admittedly, are to be used in evidence
by the plaintiff. It is matters such as these into which inquiry is precisely allowed by the rules of discovery, to the end that the parties may adequately
prepare for pre-trial and trial. The only other documents sought to be produced are needed in relation to the allegations of the counterclaim. Their
relevance is indisputable; their disclosure may not be opposed.

One last word. Due no doubt to the deplorable unfamiliarity respecting the nature, purposes and operation of the modes of discovery earlier
mentioned, 54 there also appears to be a widely entertained idea that application of said modes is a complicated matter, unduly expensive and dilatory.
Nothing could be farther from the truth. For example, as will already have been noted from the preceding discussion, all that is entailed to activate or put in
motion the process of discovery by interrogatories to parties under Rule 25 of the Rules of Court, is simply the delivery directly to a party of a letter setting
forth a list of least questions with the request that they be answered individually. 55 That is all. The service of such a communication on the party has the
effect of imposing on him the obligation of answering the questions "separately and fully in writing underoath," and serving "a copy of the answers on the
party submitting the interrogatories within fifteen (15) days after service of the interrogatories . . ." 56 The sanctions for refusing to make discovery have
already been mentioned. 57 So, too, discovery under Rule 26 is begun by nothing more complex than the service on a party of a letter or other written
communication containing a request that specific facts therein set forth and/or particular documents copies of which are thereto appended, be admitted in
writing. 58 That is all. Again, the receipt of such a communication by the party has the effect of imposing on him the obligation of serving the party requesting
admission with "a sworn statement either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he
cannot truthfully either admit or deny those matters," failing in which "(e)ach of the matters of which admission is requested shall be deemed
admitted." 59 The taking of depositions in accordance with Rule 24 (either on oral examination or by written interrogatories) while somewhat less simple, is
nonetheless by no means as complicated as seems to be the lamentably extensive notion.

WHEREFORE, the petition is DENIED, without pronouncement as to costs. The temporary restraining order issued on October 27, 1989 is hereby LIFTED AND
SET ASIDE.

SO ORDERED.
G.R. No. 204700 November 24, 2014

EAGLERIDGE DEVELOPMENT CORPORATION, MARCELO N. NAVAL and CRISPIN I. OBEN, Petitioners,

vs.
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Respondent.

RESOLUTION

LEONEN, J.:

For resolution is respondent Cameron Granville 3 Asset Management, Inc. 's motion for reconsideration1 of our April 10, 2013 decision,2 which reversed and set aside
the Court of Appeals' resolutions3 and ordered respondent to produce the Loan Sale and Purchase Agreement (LSPA) dated April 7, 2006, including its annexes and/or
attachments, if any, in order that petitioners may inspect or photocopy the same.

Petitioners Eagleridge Development Corporation, Marcelo N. Naval, and Crispin I. Oben filed on June 7, 2013 their motion to ad.mit attached opposition.4 Subsequently,
respondent filed its reply5 and petitioners their motion to admit attached rejoinder.6

The motion for reconsideration raises the following points:

(1) The motion for production was filed out of time;7

(2) The production of the LSPA would violate the parol evidence rule; and8

(3) The LSPA is a privileged and confidential document.9

Respondent asserts that there was no "insistent refusal" on its part to present the LSPA, but that petitioners filed their motion for production way out of time, even
beyond the protracted pre-trial period from September 2005 to 2011.10 Hence, petitioners had no oneto blame but themselves when the trial court denied their
motion as it was filed only during the trial proper.11

Respondent further submits that "Article 1634 [of the] Civil Code had been inappropriately cited by [p]etitioners"12inasmuch as it is Republic Act No. 9182 (Special
Purpose Vehicle Act) that is applicable.13 Nonetheless, even assuming that Article 1634 is applicable, respondent argued that petitioners are: 1) still liable to pay the
whole of petitioner Eagleridge Development Corporation’s (EDC) loanobligation, i.e., ₱10,232,998.00 exclusive of interests and/or damages; 14 and 2) seven (7) years
late in extinguishing petitioner EDC’s loan obligation because pursuant to Article 1634, they should have exercised their right of extinguishment within 30 days from the
substitution of Export and Industry Bank or EIB (the original creditor) by respondent in December 2006.15 According to respondent, the trial court order "granting the
substitution constituted sufficient judicial demand as contemplated under Article 1634."16 Also, maintaining that the LSPA is immaterial or irrelevant to the case,
respondent contends that the "[o]rder of substitution settled the issue of [respondent’s] standing before the [c]ourt and its right to fill in the shoes of [EIB]."17 It argues
that the production of the LSPA will neither prevent respondent from pursuing its claim of 10,232,998.00, exclusive of interests and penalties, from petitioner EDC, nor
write off petitioner EDC’s liability to respondent.18 The primordial issue of whether petitioners owe respondent a sum of money via the deed of assignment can
allegedly "be readily resolved by application of Civil Code provisions and/or applicable jurisprudence and not by the production/inspection of the LSPA[.]"19 Respondent
also argues that "a consideration is not always a requisite [in assignment of credits, and] an assignee may maintain an action based on his title and it is immaterial
whether ornot he paid any consideration [therefor][.]"20

Respondent also contends that: (1) the production of the LSPA will violate the parol evidence rule21 under Rule 130, Section 9 of the Rules of Court; (2) the LSPA is a
privileged/confidential bank document;22 and (3) under the Special Purpose Vehicle Act, "the only obligation of both the assignor (bank) and the assignee (the SPV;
respondent Cameron) is to give notice to the debtor (Eagleridge, Naval,and Oben) that its account has been assigned/transferred to a special purpose vehicle (Sec. 12,
R.A. 9182) [and] [i]t does not require of the special purpose vehicle or the bank to disclose all financial documents included in the assignment/sale/transfer[.]"23

Finally, respondent points out that the deed of assignment is a contested document. "Fair play would be violated if the LSPA is produced without [p]etitioners
acknowledging that respondent Cameron Granville 3 Asset Management, Inc. is the real party-in-interest because petitioners . . . would [thereafter] use . . . the
contents of a document (LSPA) to its benefit while at the same time"24 refuting the integrity of the deed and the legal personality of respondent to sue petitioners.25

For their part, petitioners counter that their motion for production was not filed out of time, and "[t]here is no proscription, under Rule 27 or any provision of the Rules
of Court, from filing motions for production, beyond the pre-trial."26

Further, assuming that there was a valid transfer of the loan obligation of petitioner EDC, Article 1634 is applicable and, therefore, petitioners must be informed of the
actual transfer price, which information may only be supplied by the LSPA.27 Petitioners argue that the substitution of respondent in the case a quowas "not sufficient
‘demand’as contemplated under Article 1634 of the Civil Code inasmuch asrespondent Cameron failed . . . to inform petitioner EDC of the price it paid for the [transfer
of the] loan obligation,"28 which made it "impossible for petitioners to reimburse what was paid for the acquisition of the . . . loan obligation [of EDC]."29 Additionally,
petitioners contend that respondent was not a party to the deed of assignment, but Cameron Granville Asset Management (SPV-AMC), Inc., hence, "as [to] the actual
parties to the Deed of Assignment are concerned, no such demand has yet been made."30

Petitioners add that the amount of their liability to respondent is one of the factual issues to be resolved as stated in the November 21, 2011 pretrial order of the
Regional Trial Court, which makes the LSPA clearly relevant and material to the disposition of the case.31

Petitioners next argue that the parol evidence rule is not applicable to them because they were not parties tothe deed of assignment, and "they cannot be prevented
from seeking evidence to determine the complete terms of the Deed of Assignment."32 Besides, the deedof assignment made express reference to the LSPA, hence,the
latter cannot be considered as extrinsic to it.33

As to respondent’s invocation that the LSPA is privileged/confidential, petitioners counter that "it has not been shown that the parties fall under . . . or, at the very least
. . . analogous to [any of the relationships enumerated in Rule 130, Section 124] that would exempt [respondent] from disclosing information as to their transaction."34

In reply, respondent argues that "[petitioners] cannot accept and reject the same instrument at the same time."35According to respondent, by allegedly "uphold[ing]
the truth of the contents as well as the validity of [the] Deed of Assignment [in] seeking the production of the [LSPA]," 36 petitioners could no longer be allowed to
impugn the validity of the same deed.37

In their rejoinder, petitioners clarified that their consistent position was always to assail the validity of the deed of assignment; that alternatively, they invoked the
application of Article 1634 should the court uphold the validity of the transfer of their alleged loan obligation; and that Rule 8, Section 2 of the Rules of Court "permits
parties to set forth alternative causes of action or defenses."38
We deny the motion for reconsideration.
Discovery mode of
production/inspection of
document may be availed of
even beyond pre-trial upon a
showing of good cause

The availment of a motion for production, as one of the modes of discovery, is not limited to the pre-trial stage. Rule 27 does not provide for any time frame within
which the discovery mode of production or inspection of documents can be utilized. The rule only requires leave of court "upon due application and a showing of due
cause."39 Rule 27, Section 1 of the 1997 Rules of Court, states:

SECTION 1. Motion for production or inspection order — Upon motion of any party showing good cause therefor the court in which an action is pending may (a) order
any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books,
accounts, letters, photographs, objects or tangible things, not privileged, which constitute or contain evidence material to any matter involved in the action and which
are in his possession, custody or control[.] (Emphasis supplied)

In Producers Bank of the Philippines v. Court of Appeals,40 this court held that since the rules are silent asto the period within which modes of discovery (in that case,
written interrogatories) may still be requested, it is necessary to determine: (1) the purposeof discovery; (2) whether, based on the stage of the proceedings and
evidence presented thus far, allowing it is proper and would facilitate the disposition of the case; and (3) whether substantial rights of parties would be unduly
prejudiced.41 This court further held that "[t]he use of discovery is encouraged, for it operates with desirable flexibility under the discretionary control of the trial
court."42

In Dasmariñas Garments, Inc. v. Reyes,43 this court declared that depositions, as a mode ofdiscovery, "may be taken at any time after the institution of any action [as
there is] no prohibition against the taking of depositions after pre-trial."44 Thus:

Dasmariñas also contends that the "taking of deposition is a mode of pretrial discovery to be availed of before the action comes to trial." Not so. Depositions may be
taken at any time after the institution of any action, whenever necessary or convenient. There is no rule that limits deposition-taking only to the period of pre-trial or
before it; no prohibition against the taking of depositions after pre-trial. Indeed, the law authorizes the taking of depositions of witnesses before or after an appeal is
taken from the judgment of a Regional Trial Court "to perpetuate their testimony for use in the event of further proceedings in the said court" (Rule 134, Rules of
Court), and even during the process of execution of a final and executory judgment (East Asiatic Co. v. C.I.R., 40 SCRA 521, 544).45

"The modes of discovery are accorded a broad and liberal treatment."46 The evident purpose of discovery procedures is "to enable the parties, consistent with
recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials"47 and, thus, facilitating an amicable settlement or expediting the
trial of the case.48

Technicalities in pleading should be avoided in order to obtain substantial justice. In Mutuc v. Judge Agloro,49 this court directed the bank to give Mutuc a complete
statement asto how his debt was computed, and should he be dissatisfied with that statement, pursuant to Rule 27 of the Rules of Court, to allow him to inspect and
copy bank records supporting the items in that statement.50 This was held to be "in consonance with the rules on discovery and the avowed policy of the Rules of Court
. . . to require the parties to lay their cards on the table to facilitate a settlement of the case before the trial."51

We have determined that the LSPA isrelevant and material to the issue on the validity of the deed of assignment raised by petitioners in the court a quo, and allowing
its production and inspection by petitioners would be more in keeping with the objectives of the discovery rules. We find no great practical difficulty, and respondent
continuously fails to allege any, in presenting the document for inspection and copying of petitioners. On the other hand, to deny petitioners the opportunity to inquire
into the LSPA would bar their access to relevant evidence and impair their fundamental right to due process.52

Article 1634 of the New Civil Code is applicable

Contrary to respondent’s stance, Article 1634 of the Civil Code on assignment of credit in litigation is applicable.

Section 13 of the Special Purpose Vehicle Act clearly provides that in the transfer of the non-performing loans to a special purpose vehicle, "the provisions on
subrogation and assignment of credits under the New Civil Code shall apply." Thus:

Sec. 13. Nature of Transfer. – All sales or transfers of NPAs to an SPV shall be in the nature of a true sale after proper notice in accordance with the procedures
asprovided for in Section 12: Provided, That GFIs and GOCCs shall be subject to existing law on the disposition of assets: Provided, further, That in the transfer of the
NPLs, the provisions on subrogation and assignment of credits under the New Civil Code shall apply.

Furthermore, Section 19 of the Special Purpose Vehicle Act expressly states that redemption periods allowed to borrowers under the banking law, the Rules of Court,
and/or other laws are applicable. Hence, the right of redemption allowed to a debtor under Article 1634 of the Civil Code is applicable to the case a quo.

Accordingly, petitioners may extinguish their debt by paying the assignee-special purpose vehicle the transfer price plus the cost of money up to the time of redemption
and the judicial costs.

Petitioners’ right to
extinguish their debt has not
yet lapsed

Petitioners’ right to extinguish their debt under Article 1634 on assignment of credits has not yet lapsed. The pertinent provision is reproduced here:

Art. 1634. When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to extinguish it by reimbursing the assignee for the price the latter
paid therefor, the judicial costs incurred by him, and the interest on the price from the day on which the same was paid. A credit or other incorporeal right shall be
considered in litigation from the time the complaint concerning the same is answered.

The debtor may exercise his right within thirty days from the date the assignee demands payment from him. (Emphasis supplied)

Under the last paragraph of Article 1634, the debtor may extinguish his or her debt within 30 days from the date the assignee demands payment. In this case, insofar as
the actual parties to the deed of assignment are concerned, no demand has yet been made, and the 30-day period did not begin to run. Indeed, petitioners assailed
before the trial court the validity of the deed of assignment on the groundsthat it did not comply with the mandatory requirements of the Special Purpose Vehicle
Act,53 and it referred to Cameron Granville Asset Management (SPV-AMC), Inc., as the assignee, and not respondent Cameron Granville 3 Asset Management, Inc.54 The
law requires that payment should be made only "to the person in whose favor the obligation has been constituted, or his [or her] successor in interest, or any person
authorized to receive it."55 It was held that payment made to a person who is not the creditor, his or her successor-in-interest, or a person who is authorized to receive
payment, even through error or good faith, is not effective payment which will bind the creditor or release the debtor from the obligation to pay.56 Therefore, it was
important for petitioners to determine for sure the proper assignee of the EIB credit or who to pay, in order to effectively extinguish their debt.

Moreover, even assuming that respondent is the proper assignee of the EIB credit, petitioners could not exercise their right of extinguishment because they were not
informed of the consideration paid for the assignment.57

Respondent must, pursuant to Article 1634 of the Civil Code, disclose how much it paid to acquire the EIB credit, so that petitioners could make the corresponding offer
to pay, by way of redemption, the same amount in final settlement of their obligation.

Respondent insists that the transfer price of the EIB credit is ₱10,232,998.00 (the actual amount and value of the credit), and that petitioners should have paid the said
amount within 30 days from the December 8, 2006 order of the Regional Trial Court approving its substitution of EIB.58 Petitioners believe otherwise, and as the deed of
assignment was silent on the matter, it becomes necessary to verify the amount of the consideration from the LSPA.

Assuming indeed that respondent acquired the EIB credit for a lesser consideration, it cannot compel petitioners to pay or answer for the entire original EIB credit, or
more thanwhat it paid for the assignment.

Under the circumstances of this case, the 30-day period under Article 1634 within which petitioners could exercise their right to extinguish their debt should begin to
run only from the time they were informed of the actual price paid by the assignee for the transfer of their debt. Parol evidence rule is not applicable

Claiming further the impropriety of allowing the production of the LSPA, respondent contends that the presentation of the document and its annexes would violate the
parol evidence rule in Rule 130, Section 9:

SEC. 9. Evidence of written agreements.—When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and
there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of the written agreement ifhe puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term "agreement" includes wills.

We disagree.

The parol evidence rule does notapply to petitioners who are not parties to the deed of assignment and do not base a claim on it.59 Hence, they cannot be prevented
from seeking evidence to determine the complete terms of the deed of assignment.

Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second paragraph iswhen the party puts in issue the validity of the written
agreement, as in the case a quo.

Besides, what is forbidden under the parol evidence rule is the presentation of oral or extrinsic evidence, not those expressly referred to in the written agreement.
"[D]ocuments canbe read together when one refers to the other."60 By the express terms of the deed of assignment, it is clear that the deed of assignment was meant
to be read in conjunction with the LSPA.

As we have stated in our decision, Rule 132, Section 1761 of the Rules of Court allows a party to inquire into the whole of the writing or record when a part of it is given
in evidence by the other party. Since the deed of assignment was produced in court by respondent and marked as one of its documentary exhibits, the LSPA which was
made a part thereof by explicit reference and which is necessary for its understanding may also be inquired into by petitioners.

The LSPA is not privileged

and confidential in nature

Respondent’s contention that the LSPAis privileged and confidential is likewise untenable.

Indeed, Rule 27 contains the proviso that the documents sought to be produced and inspected must not be privileged against disclosure. Rule 130, Section 24 describes
the types of privileged communication. These are communication between or involving the following: (a) between husband and wife; (b) between attorney and client;
(c) between physician and patient; (d) between priest and penitent; and (e) public officers and public interest.

Privileged communications under the rules of evidence is premised on an accepted need to protect a trust relationship. It has not been shown that the parties to the
deed of assignment fall under any of the foregoing categories.

This court has previously cited other privileged matters such as the following: "(a) editors may not be compelled to disclose the source of published news; (b) voters
may not be compelled to disclose for whom they voted; (c) trade secrets; (d) information contained in tax census returns; . . . (d) bank deposits"62 (pursuant to the
Secrecy of Bank Deposits Act); (e) national security matters and intelligence information; 63 and (f) criminal matters.64 Nonetheless, the LSPA does not fall within any of
these classes of information. Moreover, the privilegeis not absolute, and the court may compel disclosure where it is indispensable for doing justice.

At any rate, respondent failed to discharge the burden of showing that the LSPA is a privileged document.1âwphi1Respondent did not present any law or regulation
that considers bank documents such as the LSPA as classified information. Its contention that the Special Purpose Vehicle Act 65 only requires the creditor-bank to give
notice to the debtor of the transfer of his or her account to a special purpose vehicle, and that the assignee-special purpose vehicle has no obligation to disclose other
financial documents related to the sale, is untenable. The Special Purpose Vehicle Act does not explicitly declare these financial documents as privileged matters.
Further, as discussed, petitioners are not precluded from inquiring as to the true consideration of the assignment, precisely because the same law in relation to Article
1634 allows the debtor to extinguish its debt by reimbursing the assignee-special purpose vehicle of the actual price the latter paid for the assignment.
An assignment of a credit "produce[s] no effect as against third persons, unless it appears ina public instrument[.]" 66It strains reason why the LSPA, which by law must
be a publicinstrument to be binding against third persons such as petitioners-debtors, is privileged and confidential.

Alternative defenses are

allowed under the Rules

Finally, respondent’s contention that petitioners cannot claim the validity and invalidity of the deed ofassignment at the same time is untenable.

The invocation by petitioners of Article 1634, which presupposes the validity of the deed of assignment orthe transfer of the EIB credit to respondent, even if it would
run counter to their defense on the invalidity of the deed of assignment, is proper and sanctioned by Rule 8, Section 2 of the Rules of Court, which reads:

SEC. 2. Alternative causes of action or defenses. — A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one
causeof action or defense or in separate causes of action or defenses. When two or more statements are made in the alternative and one of them if made
independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. (Emphasis supplied)

All told, respondent failed to allege sufficient reasons for us to reconsider our decision. Verily, the production and inspection of the LSPA and its annexes fulfill the
discovery-procedures objective of making the trial "less a game of blind man’s buff and morea fair contest with the basic issues and facts disclosed to the fullest
practicable extent."67

WHEREFORE, the motion for reconsideration is DENIED WITH FINALITY.

SO ORDERED.

G.R. No. 185527 July 18, 2012

HARRY L. GO, TONNY NGO, JERRY NGO AND JANE GO, Petitioners,
vs.
THE PEOPLE OF THE PHILIPPINES and HIGHDONE COMPANY, LTD., ET AL., Respondents.

The procedure for taking depositions in criminal cases recognizes the prosecution's right to preserve testimonial evidence and prove its case despite the unavailability
of its witness. It cannot, however, give license to prosecutorial indifference or unseemly involvement in a prosecution witness' absence from trial. To rule otherwise
would effectively deprive the accused of his fundamental right to be confronted with the witnesses against him.

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioners seek to nullify and set aside the February 19, 2008 Decision1 and
November 28, 2008 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 99383, which reversed the September 12, 2006 Order3 issued by the Regional Trial Court
(RTC) of Manila, Branch 27 in Civil Case No. 06-114844 and upheld the grant of the prosecution’s motion to take the testimony of a witness by oral depositions in Laos,
Cambodia.

Petitioners Harry Go, Tonny Ngo, Jerry Ngo and Jane Go were charged before the Metropolitan Trial Court (MeTC) of Manila for Other Deceits under Article 318 of the
Revised Penal Code (RPC) docketed as Criminal Case No. 396447. The Information4 dated September 24, 2003, later amended5 on September 14, 2004, reads:

"That sometime in August 1996, in the City of Manila, Philippines, the said accused, conspiring, confederating together and helping one another, did then and there
willfully, unlawfully and feloniously defraud Highdone Company Ltd. Represented by Li Luen Ping, in the following manner, to wit: all said accused, by means of false
manifestations and fraudulent representations which they made to said Li Luen Ping to the effect that they have chattels such as machinery, spare parts, equipment
and raw materials installed and fixed in the premises of BGB Industrial Textile Mills Factory located in the Bataan Export Processing Zone (BEPZ) in Mariveles, Bataan,
executed a Deed of Mortgage for a consideration of the amount of $464,266.90 or its peso equivalent at P20,892,010.50 more or less in favor of ML Resources and
Highdone Company Ltd. Representing that the said deed is a FIRST MORTGAGE when in truth and in fact the accused well knew that the same had been previously
encumbered, mortgaged and foreclosed by CHINA BANK CORPORATION as early as September 1994 thereby causing damage and prejudice to said HIGHDONE
COMPANY LTD., in the said amount of $464,266.90 or its peso equivalent at P20,892,010.50 more or less."

Upon arraignment, petitioners pleaded not guilty to the charge.

The prosecution's complaining witness, Li Luen Ping, a frail old businessman from Laos, Cambodia, traveled from his home country back to the Philippines in order to
attend the hearing held on September 9, 2004. However, trial dates were subsequently postponed due to his unavailability.

On October 13, 2005, the private prosecutor filed with the MeTC a Motion to Take Oral Deposition 6 of Li Luen Ping, alleging that he was being treated for lung infection
at the Cambodia Charity Hospital in Laos, Cambodia and that, upon doctor's advice, he could not make the long travel to the Philippines by reason of ill health.

Notwithstanding petitioners' Opposition,7 the MeTC granted8 the motion after the prosecution complied with the directive to submit a Medical Certificate of Li Luen
Ping. Petitioners sought its reconsideration which the MeTC denied,9 prompting petitioners to file a Petition for Certiorari10 before the RTC.

On September 12, 2006, the RTC granted the petition and declared the MeTC Orders null and void. 11 The RTC held that Section 17, Rule 23 on the taking of depositions
of witnesses in civil cases cannot apply suppletorily to the case since there is a specific provision in the Rules of Court with respect to the taking of depositions of
prosecution witnesses in criminal cases, which is primarily intended to safeguard the constitutional rights of the accused to meet the witness against him face to face.

Upon denial by the RTC of their motion for reconsideration through an Order dated March 5, 2006,12 the prosecution elevated the case to the CA.

On February 19, 2008, the CA promulgated the assailed Decision which held that no grave abuse of discretion can be imputed upon the MeTC for allowing the
deposition-taking of the complaining witness Li Luen Ping because no rule of procedure expressly disallows the taking of depositions in criminal cases and that, in any
case, petitioners would still have every opportunity to cross-examine the complaining witness and make timely objections during the taking of the oral deposition either
through counsel or through the consular officer who would be taking the deposition of the witness.

On November 28, 2008, the CA denied petitioners' motion for reconsideration. Hence, this petition alleging that –

I.THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE METROPOLITAN TRIAL COURT INFRINGED THE CONSTITUTIONAL RIGHT OF THE PETITIONERS TO
A PUBLIC TRIAL IN ALLOWING THE TAKING OF THE DEPOSITION OF THE COMPLAINING WITNESS IN LAOS, CAMBODIA.
 II.THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE DEPOSITION TAKING OF THE COMPLAINING WITNESS IN LAOS, CAMBODIA IS AN
INFRINGEMENT OF THE CONSTITUTIONAL RIGHT OF THE PETITIONERS TO CONFRONT THE SAID WITNESS FACE TO FACE.

III.THE COURT OF APPEALS ERRED IN SUSTAINING THE JUDICIAL LEGISLATION COMMITTED BY THE METROPOLITAN TRIAL COURT IN APPLYING THE RULES
ON DEPOSITION-TAKING IN CIVIL CASES TO CRIMINAL CASES.

IV.THE COURT OF APPEALS ERRED IN LIMITING THE TRADITIONAL DEFINITION OF GRAVE ABUSE OF DISCRETION, OVERLOOKING THE ESTABLISHED RULE
THAT VIOLATION OF THE CONSTITUTION, THE LAW OR JURISPRUDENCE SIMILARLY COMES WITHIN THE PURVIEW OF GRAVE ABUSE OF DISCRETION.

We rule in favor of petitioners.

The Procedure for Testimonial Examination of an Unavailable Prosecution Witness is Covered Under Section 15, Rule 119.

The examination of witnesses must be done orally before a judge in open court.13 This is true especially in criminal cases where the Constitution secures to the accused
his right to a public trial and to meet the witnessess against him face to face. The requirement is the "safest and most satisfactory method of investigating facts" as it
enables the judge to test the witness' credibility through his manner and deportment while testifying. 14 It is not without exceptions, however, as the Rules of Court
recognizes the conditional examination of witnesses and the use of their depositions as testimonial evidence in lieu of direct court testimony.

Even in criminal proceedings, there is no doubt as to the availability of conditional examination of witnesses – both for the benefit of the defense, as well as the
prosecution. The Court's ruling in the case of Vda. de Manguerra v. Risos15 explicitly states that –

"x x x As exceptions, Rule 23 to 28 of the Rules of Court provide for the different modes of discovery that may be resorted to by a party to an action. These rules are
adopted either to perpetuate the testimonies of witnesses or as modes of discovery. In criminal proceedings, Sections 12, 13 and 15, Rule 119 of the Revised Rules of
Criminal Procedure, which took effect on December 1, 2000, allow the conditional examination of both the defense and prosecution witnesses." (Underscoring
supplied)16

The procedure under Rule 23 to 28 of the Rules of Court allows the taking of depositions in civil cases, either upon oral examination or written interrogatories, before
any judge, notary public or person authorized to administer oaths at any time or place within the Philippines; or before any

Philippine consular official, commissioned officer or person authorized to administer oaths in a foreign state or country, with no additional requirement except
reasonable notice in writing to the other party.17

But for purposes of taking the deposition in criminal cases, more particularly of a prosecution witness who would forseeably be unavailable for trial, the testimonial
examination should be made before the court, or at least before the judge, where the case is pending as required by the clear mandate of Section 15, Rule 119 of the
Revised Rules of Criminal Procedure. The pertinent provision reads thus:

SEC. 15. Examination of witness for the prosecution. – When it satisfactorily appears that a witness for the prosecution is too sick or infirm to appear at the trial as
directed by the court, or has to leave the Philippines with no definite date of returning, he may forthwith be conditionally examined before the court where the case is
pending. Such examination, in the presence of the accused, or in his absence after reasonable notice to attend the examination has been served on him shall be
conducted in the same manner as an examination at the trial. Failure or refusal of the accused to attend the examination after notice shall be considered a waiver. The
statement taken may be admitted in behalf of or against the accused.

Since the conditional examination of a prosecution witness must take place at no other place than the court where the case is pending, the RTC properly nullified the
MeTC's orders granting the motion to take the deposition of Li Luen Ping before the Philippine consular official in Laos, Cambodia. We quote with approval the RTC's
ratiocination in this wise:

The condition of the private complainant being sick and of advanced age falls within the provision of Section 15 Rule 119 of the Rules of Court. However, said rule
substantially provides that he should be conditionally examined before the court where the case is pending. Thus, this Court concludes that the language of Section 15
Rule 119 must be interpreted to require the parties to present testimony at the hearing through live witnesses, whose demeanor and credibility can be evaluated by
the judge presiding at the hearing, rather than by means of deposition. No where in the said rule permits the taking of deposition outside the Philippines whether the
deponent is sick or not.18(Underscoring supplied)

Certainly, to take the deposition of the prosecution witness elsewhere and not before the very same court where the case is pending would not only deprive a detained
accused of his right to attend the proceedings but also deprive the trial judge of the opportunity to observe the prosecution witness' deportment and properly assess
his credibility, which is especially intolerable when the witness' testimony is crucial to the prosecution's case against the accused. This is the import of the Court's ruling
in Vda. de Manguerra19 where we further declared that –

While we recognize the prosecution's right to preserve the testimony of its witness in order to prove its case, we cannot disregard the rules which are designed mainly
for the protection of the accused's constitutional rights. The giving of testimony during trial is the general rule. The conditional examination of a witness outside of the
trial is only an exception, and as such, calls for a strict construction of the rules.20 (Underscoring supplied)

It is argued that since the Rules of Civil Procedure is made explicitly applicable in all cases, both civil and criminal as well as special proceedings, the deposition-taking
before a Philippine consular official under Rule 23 should be deemed allowable also under the circumstances.

However, the suggested suppletory application of Rule 23 in the testimonial examination of an unavailable prosecution witness has been categorically ruled out by the
Court in the same case of Vda. de Manguerra, as follows:

It is true that Section 3, Rule 1 of the Rules of Court provides that the rules of civil procedure apply to all actions, civil or criminal, and special proceedings. In effect, it
says that the rules of civil procedure have suppletory application to criminal cases. However, it is likewise true that criminal proceedings are primarily governed by the
Revised Rules of Criminal Procedure.

Considering that Rule 119 adequately and squarely covers the situation in the instant case, we find no cogent reason to apply Rule 23 suppletorily or otherwise."
(Underscoring supplied)

The Conditional Examination of a Prosecution Witness Cannot Defeat the Rights of the Accused to Public Trial and Confrontation of Witnesses

The CA took a simplistic view on the use of depositions in criminal cases and overlooked fundamental considerations no less than the Constitution secures to the
accused, i.e., the right to a public trial and the right to confrontation of witnesses. Section 14(2), Article III of the
Constitution provides as follows:

Section 14. (1) x x x

(2) In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and shall enjoy the right to be heard by himself and counsel, to be
informed of the nature and cause of the accusation against him, to have a speedy, impartial and public trial, to meet the witnesses face to face, and to have compulsory
process to secure the attendance of witnesses and the production of evidence in his behalf. However, after arraignment, trial may proceed notwithstanding the
absence of the accused provided that he has been duly notified and his failure to appear is unjustifiable. (Underscoring supplied)

In dismissing petitioners' apprehensions concerning the deprivation of their constitutional rights to a public trial and confrontation, the CA opined that petitioners
would still be accorded the right to cross-examine the deponent witness and raise their objections during the deposition-taking in the same manner as in a regular court
trial.

We disagree. There is a great deal of difference between the face-to- face confrontation in a public criminal trial in the presence of the presiding judge and the cross-
examination of a witness in a foreign place outside the courtroom in the absence of a trial judge. In the aptly cited case of People v. Estenzo,21 the Court noted the
uniqueness and significance of a witness testifying in open court, thus:

"The main and essential purpose of requiring a witness to appear and testify orally at a trial is to secure for the adverse party the opportunity of cross-examination.
"The opponent", according to an eminent authority, "demands confrontation, not for the idle purpose of gazing upon the witness, or of being gazed upon by him, but
for the purpose of cross examination which cannot be had except by the direct and personal putting of questions and obtaining immediate answers." There is also the
advantage of the witness before the judge, and it is this – it enables the judge as trier of facts "to obtain the elusive and incommunicable evidence of a witness'
deportment while testifying, and a certain subjective moral effect is produced upon the witness. It is only when the witness testifies orally that the judge may have a
true idea of his countenance, manner and expression, which may confirm or detract from the weight of his testimony. Certainly, the physical condition of the witness
will reveal his capacity for accurate observation and memory, and his deportment and physiognomy will reveal clues to his character. These can only be observed by the
judge if the witness testifies orally in court. x x x"22 (Underscoring supplied)1âwphi1

The right of confrontation, on the other hand, is held to apply specifically to criminal proceedings and to have a twofold purpose: (1) to afford the accused an
opportunity to test the testimony of witnesses by cross-examination, and (2) to allow the judge to observe the deportment of witnesses.23 The Court explained in
People v. Seneris24 that the constitutional requirement "insures that the witness will give his testimony under oath, thus deterring lying by the threat of perjury charge;
it forces the witness to submit to cross-examination, a valuable instrument in exposing falsehood and bringing out the truth; and it enables the court to observe the
demeanor of the witness and assess his credibility."25

As the right of confrontation is intended "to secure the accused in the right to be tried as far as facts provable by witnesses as meet him face to face at the trial who
give their testimony in his presence, and give to the accused an opportunity of cross-examination,"26 it is properly viewed as a guarantee against the use of unreliable
testimony in criminal trials. In the American case of Crawford v. Washington,27 the US Supreme Court had expounded on the procedural intent of the confrontation
requirement, thus:

Where testimonial statements are involved, we do not think the Framers meant to leave the Sixth Amendment's right to confront witness face to face protection to the
vagaries of the rules of evidence, much less to amorphous notions of "reliability". Certainly, none of the authorities discussed above acknowledges any general
reliability exception to the common-law rule.

Admitting statements deemed reliable by a judge is fundamentally at odds with the right of confrontation. To be sure, the Clause's ultimate goal is to ensure reliability
of evidence, but it is a procedural rather than a substantive guarantee. It commands, not that evidence be reliable, but that reliability be assessed in a particular
manner: by testing in the crucible of cross-examination. The Clause thus reflects a judgment, not only about the desirability of reliable evidence (a point on which there
could be little dissent), but about how reliability can best be determined." (Underscoring supplied)

The Webb Ruling is Not on All Fours with the Instant Case

The CA found the frail and infirm condition of the prosecution witness as sufficient and compelling reason to uphold the MeTC Orders granting the deposition-taking,
following the ruling in the case of People v. Webb28 that the taking of an unavailable witness' deposition is in the nature of a discovery procedure the use of which is
within the trial court's sound discretion which needs only to be exercised in a reasonable manner and in consonance with the spirit of the law.29

But the ruling in the cited case is not instantly applicable herein as the factual settings are not similar.1âwphi1 The accused in the Webb case had sought to take the
oral deposition of five defense witnesses before a Philippine consular agent in lieu of presenting them as live witnesses, alleging that they were all residents of the
United States who could not be compelled by subpoena to testify in court. The trial court denied the motion of the accused but the CA differed and ordered the
deposition taken. When the matter was raised before this Court, we sustained the trial court's disallowance of the deposition-taking on the limited ground that there
was no necessity for the procedure as the matter sought to be proved by way of deposition was considered merely corroborative of the evidence for the defense.30

In this case, where it is the prosecution that seeks to depose the complaining witness against the accused, the stringent procedure under Section 15, Rule 119 cannot
be ignored without violating the constitutional rights of the accused to due process.

Finally, the Court takes note that prosecution witness Li Luen Ping had managed to attend the initial trial proceedings before the MeTC of Manila on September 9,
2004. At that time, Li Luen Ping's old age and fragile constitution should have been unmistakably apparent and yet the prosecution failed to act with zeal and foresight
in having his deposition or testimony taken before the MeTC pursuant to Section 15, Rule 119 of the Revised Rules of Court. In fact, it should have been imperative for
the prosecution to have moved for the preservation of Li Luen Ping's testimony at that first instance given the fact that the witness is a non-resident alien who can leave
the Philippines anytime without any definite date of return. Obviously, the prosecution allowed its main witness to leave the court's jurisdiction without availing of the
court procedure intended to preserve the testimony of such witness. The loss of its cause is attributable to no other party.

Still, even after failing to secure Li Luen Ping's conditional examination before the MeTC prior to said witness' becoming sick and unavailable, the prosecution would
capitalize upon its own failure by pleading for a liberal application of the rules on depositions. It must be emphasized that while the prosecution must provide the
accused every opportunity to take the deposition of witnesses that are material to his defense in order to avoid charges of violating the right of the accused to
compulsory process, the State itself must resort to deposition-taking sparingly if it is to guard against accusations of violating the right of the accused to meet the
witnesses against him face to face. Great care must be observed in the taking and use of depositions of prosecution witnesses to the end that no conviction of an
accused will rely on ex parte affidavits and deposition.31

Thus, the CA ignored the procedure under the Revised Rules of Criminal Procedure for taking the deposition of an unavailable prosecution witness when it upheld the
trial court's order allowing the deposition of prosecution witness Li Luen Ping to take place in a venue other than the court where the case is pending. This was certainly
grave abuse of discretion.

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated February 19, 2008 and the Resolution dated November 28, 2008 of the Court of Appeals are
REVERSED and SET ASIDE. Accordingly, the Decision of the Regional Trial Court which disallowed the deposition-taking in Laos, Cambodia is REINSTATED.