Fortune Corporation v.

CA
Depositions | January 19, 1994 | Regalado

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

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

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

DOCTRINE: WHEN DEPOSITIONS MAY BE TAKEN PENDING ACTION – By leave of court after jurisdiction has been
obtained over any defendant or property which is the subject of the action, or without such leave after an answer has
been served, the testimony of any person, whether a party or not, may be taken, at the instance of any party, by
deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by the use
of a subpoena as provided in Rule 23. Depositions shall be taken only in accordance with these rules. The deposition of a
person confined in prison may be taken only by leave of court on such terms as the court prescribes. [Sec. 1, Rule 24]

FACTS OF THE CASE:

Nature Petition for review on certiorari on decision of CA

Parties Petitioners: Fortune Corporation

Respondents: Court of Appeals, Inter-Merchants Corporation

PROCEDURAL HISTORY:

RTC San Pablo City  PET filed an ACTION FOR BREACH OF CONTRACT against RESP.
After RESP filed its ANSWER, PET served them with WRITTEN
INTEROGATORIES (INTEROGATORIES) pursuant to Rule 25. The
INTERROGATORIES were answered by RESP, through its
 chairman, Juanito Teope (Teope)
 PRE-TRIAL CONFERENCE was scheduled for 1/9, 2/12/ and
4/22, 1992.
 3/26/96, PET served a NOTICE TO TAKE DEPOSITION UPON
ORAL EXAMINATION (NOTICE) on RESP, informing the latter
that PET would take the deposition of Teope on 4/7/92, at San
Pablo City in accordance with Sec. 15, Rule 24.
 RESP filed an URGENT MTN NOT TO TAKE
DEPOSITION/VEHEMENT OPPOSITION TO THE NOTICE,
alleging: (1) that PET has previously availed of a mode of
discovery which practically covered all the claims,
counterclaims and defenses in the case—written
interrogatories; (2) that there is no sound reason or
justification for taking oral deposition; (3) that such taking
would cause annoyance, embarrassment and oppression upon
Teope; (4) that Teope has no intention of leaving the country;
and (5) that Teope is available to testify in open court if
required during trial on the merits.
 4/3/92, the RTC issued an ORDER DENYING the NOTICE ruling
that Teope’s deposition appears unwarranted as: (1) he had
earlier already responded to PET’s written interrogatories; (2)
has signified his availability to testify in court; and (3) that
allowing the deposition would deprive the Court of the
opportunity to ask clarificatory questions on Teope, who
appears to be a vital witness.
 PET’s MR was DENIED.

SC; Remanded to CA  PET filed a PTN FOR REVIEW ON CERTIORARI before the SC,
but the latter REFRRED the case to the CA for reconsideration
and adjudication on the merits.
 The CA DISMISSED the PTN, holding: (1) that taking a
deposition is discretionary on the RTC; (2) that the RTC had 3
reason to deny the NOTICE; and (3) appeal, not certiorari is
the proper remedy to correct errors as to the admission or
rejection of a deposition being offered as evidence, as such
involves errors of law regarding the rules of evidence. PET’s
MR was DENIED.

Supreme Court again  PET filed a PTN FOR REVIEW ON CERTIORARI, averring:
o (1) that the CA’s dismissal based on alleged improper
remedy is erroneous as such ruling is a
misapprehension of facts because: (a) that PET had
not taken a deposition; (b) that no such deposition
was offered as evidence; and (c) that there was no
such offer of deposition as evidence to be rejected;
o (2) that in line with the purpose of taking depositions
pending action, the same should be done and finished
before trial;
o (3) that it would be GADALEJ to compel PET to
proceed with trial without undertaking the proposed
 deposition;
o (4) that appeal will be an inadequate remedy because
it that situation, the RTC would have rendered a
decision without PET having had the opportunity to
use the deponent’s answers;
o (5) that reversal on appeal of the RTC would only
unnecessarily entail retrial in the same; (6) t
o hat the reasons advanced by the RTC in denying its
NOTICE is not “good cause;”
o (7) that a mere allegation, without proof, that PET
intended to annoy, harass or oppress Teope is not
sufficient justification by the RTC.

ISSUES & RATIO:

1) W/N RTC was in GADALEJ in denying Pet’s Notice to Take Deposition upon Oral Exam? YES
NATURE AND OBJECT OF LITIGATION – It is 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. [Alonzo v. Villamor]

STANDARDS IN CONDUCT OF LITIGATION – It is the duty of each contending party to lay before the court the facts in
issue. Initially, this is made via pleadings covering only “ultimate facts.” However, “evidentiary matters” may be
requested by the parties before trial based on the policy that even before trial or pre-trial, parties should discover for
themselves all the relevant facts to the action known to them and their adversaries. The Rules make this possible via
Rules 24 to 29.

DEPOSITION
 To ensure that availment of the modes of discovery would be unimpeded and efficacious, Rule 29 imposes
serious sanctions on the party who refuses to comply with or respond to the modes of discovery.
 WHEN DEPOSITIONS MAY BE TAKEN PENDING ACTION – By leave of court after jurisdiction has been obtained
over any defendant or property which is the subject of the action, or without such leave after an answer has
been served, the testimony of any person, whether a party or not, may be taken, at the instance of any party, by
deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by
the use of a subpoena as provided in Rule 23. Depositions shall be taken only in accordance with these rules.
The deposition of a person confined in prison may be taken only by leave of court on such terms as the court
prescribes. [Sec. 1, Rule 24]
 ORDERS FOR PROTECTION OF PARTIES AND DEPONENTS – After notice is served for taking a deposition by oral
examination, upon motion seasonably made by any party or by the person to be examined and upon notice and
for good cause shown, the court in which the action is pending may, among others, make an order that the
deposition shall not be taken. [Sec. 16, Rule 24] This provision vests the court with power and discretion to order
that deposition shall not be taken.
o GOOD CAUSE – Means a substantial reason—one that affords a legal excuse. Such is determined by the
court in the exercise of judicial discretion. There is no hard and fast rule for determining the question as
to what is meant by the term "for good cause shown." What constitutes good cause depends upon the
kind of protective order that is sought.
o ONUS PROBANDI – The requirement that “good cause be shown” for a protective order puts the burden
on the party seeking relief to show some plainly adequate reasons for the order. A particular and
specific demonstration of facts, as distinguished from conclusory statements, is required to establish
good cause for the issuance of a protective order. A mere allegation, without proof, that the deposition
is being taken in bad faith is not sufficient ground to deny a protection order.
 o ORDERS TO PROTECT PART/WITNESS FROM ANNOYANCE OR OPPRESSION – May be issued if the
following requisites are shown: (a) that there is a motion made by any party or by the person to be
examined; (b) that the motion has been seasonably filed; (c) that there is good cause shown; and (d)
that notice of such motion has been served to the other party. Once a party has requested discovery,
the burden is on the party objecting to show that the discovery requested is not relevant to the issues,
and to establish the existence of any privilege. Inconvenience to the party whose deposition is to be
taken is not a valid objection to the taking of his deposition.
 LIMITATIONS TO DISCOVERY – (1) When it can be shown that the examination is being conducted in bad faith or
in such a manner as to annoy, embarrass, or oppress the person subject to the inquiry; (2) When the inquiry
touches upon the irrelevant or encroaches upon the recognized domains of privilege.
 SIGNIFICANCE/PURPOSE OF MODES OF DISCOVERY – The rules on pre-trial discovery of testimony, inspection
of documentary evidence and other tangible things, and examination of property and person satisfy the need to
supplement pleadings, for the purpose of disclosing the real points of dispute and affording an adequate factual
basis in preparation for trial. The rules are grounded on the limitations of the pleadings as they are not
successful as fact-sifting mechanisms and that attempts to force them to serve that purpose have resulted only
in making the pleadings complicated and technical. The various modes or instruments of discovery are meant to
serve (1) as a 1 Such as dismissing his 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 to support or oppose designated claims or defenses; striking out his pleadings or parts
thereof; or staying further proceedings. 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.
 LIBERAL CONSTRUCTION ON MODES OF DISCOVERY PROCEDURE
o The scope of discovery is to be liberally construed so as to provide the litigants with information
essential to the expenditious and proper litigation of each of the facts in dispute.
o NOTE: The various methods of discovery are intended to be cumulative, as opposed to alternative or
mutually exclusive.
o The benefits of a liberal treatment are: (1) It is of great assistance in ascertaining the truth and in
checking and preventing perjury because: (a) the witness (including a party) is examined while his
memory is fresh; (b) the witness (including a party) is generally not coached in preparation for a pre-trial
oral examination with the result that his testimony is likely to be more spontaneous; (c) a party or
witness whose deposition has been taken at an early stage in the litigation cannot, at a later date,
readily manufacture testimony in contradiction to his deposition; (d) testimony is preserved, so that if a
witness unexpectedly dies or becomes unavailable at the trial, his deposition is available; (2) it is an
effective means of detecting and exposing false, fraudulent, and sham claims and defenses; (3) it makes
available in a simple, convenient, and often inexpensive way facts which otherwise could not have been
proved, except with great difficulty and sometimes not at all (4) it educates the parties in advance of
trial as to the real value of their claims and defenses, thereby encouraging settlements out of court; (5)
it expediates the disposal of litigation, saves the time of the courts, and clears the docket of many cases
by settlements and dismissals which otherwise would have to be tried; (6) It safeguards against surprise
at the trial, prevents delays, and narrows and simplifies the issues to be tried, thereby expediting the
trial; and (7) it facilitates both the preparation and trial of the cases.
 SCOPE OF DEPOSITIONS/INTERROGATORIES – The field of inquiry that may be covered by depositions or
interrogatories is as broad as when the interrogated party is called as witness to testify. The inquiry extends to
all relevant facts, whether ultimate or evidentiary, expecting only privileged matters. The rules generally allow
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; as well as (2) (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.
 ADVANTAGES OF ORAL DEPOSITION OVER WRITTEN ONES – (1) Examination by interrogatories is more
cumbersome and less efficient than oral examination before trial. Where the examination by interrogatories has
been inadequate, the court unquestionably has, and in a proper case should exercise, discretion to permit an
 oral examination. (2) Interrogatories are inferior to oral examination as (a) they give a party more time to study
and better opportunity to frame their answers; and (b) there is a tendency for an interrogatory to grown in
number, complexity and variety of form, becoming difficult to administer. (3) Depositions are preferable if a
searching interrogation of the other party is desired as the examining party has greater flexibility in framing his
questions.
WRIT OF CERTIORARI (RULE 65)
 REQUISITES OF CERTIORARI – (a) that it is directed against a tribunal, board or officer exercising judicial
functions; (b) that such tribunal, board or officer has acted without or in excess of jurisdiction or with grave
abuse of discretion; and (c) that there is no appeal nor any plain, speedy and adequate remedy in the ordinary
course of law.
 GENERAL RULES
o Certiorari will generally not lie to review a discretionary action of any tribunal.
o A writ of certiorari is available only to review final judgments or decrees, and will be refused where
there has been no final judgment or order and the proceeding for which the writ is sought is still
pending and undetermined in the lower tribunal.
 WRIT OF CERTIORARI VIS-À-VIS DEPOSITION
o GENERAL RULES – Certiorari will not lie to review or correct discovery orders made prior to trial. This is
because like other discovery orders, such are merely interlocutory and not appealable.
o EXCEPTION – Discretionary acts will be reviewed: (1) where the lower court or tribunal has acted
without or in excess of its jurisdiction; (2) where an interlocutory order does not conform to essential
requirements of law and may reasonably cause material injury throughout subsequent proceedings for
which the remedy of appeal will be inadequate; or (3) where there is a clear or serious abuse of
discretion.
Certiorari may be availed of to review the RTC’s questioned orders.
o RESP failed to establish that there is good cause to support the RTC order that the deposition shall not be taken.
The fact that PET previously availed of other modes of discovery cannot be considered “good cause.”
o The fact that information similar to that sought had been obtained by answers to interrogatories does
not bar an examination before trial, and is not a valid objection to the taking of a deposition where there
is no duplication and the examining party is not acting in bad faith.
o Knowledge of the facts by the petitioner concerning which the proposed deponent is to be examined
does not justify a refusal of such examination.
o The fact that a bill of particulars had previously been served and interrogatories answered is not an
objection to an oral examination since no duplication was involved and bad faith has been shown.
[Canuso v. City of Niagra Falls]
o Oral examination is allowed, even though the individual had previously answered interrogatories, except
as to matters with respect to which he had "given responsive and categorical testimony.” [Bell & Co. v.
Catalda Fine Arts, Inc.]
o The fact that a party has resorted to a particular method of discovery will not bar subsequent use of other
discovery devices, as long as the party is not attempting to circumvent a ruling of the court, or to harass or
oppress the other party. As a matter of practice, it will often be desirable to resort to both interrogatories and
depositions in one or the other sequence.
o Additional lines of inquiry may come to light after the deposition has been taken, as to which written
interrogatories probably would be adequate.
o Interrogatories may well be used as a preliminary to the taking of depositions, in order to ascertain what
individuals have the information sought.
o If the answers to interrogatories are evasive and unsatisfactory, the interrogating party should be able
to utilize the more effective method of oral examination rather than have to reframe interrogatories.
o The availability of the Teope to testify in court does not constitute "good cause" to justify the court's order
that his deposition shall not be taken. That the witness is unable to attend or testify cannot be successfully
invoked to prohibit the taking of his deposition.
 o The mere fact that the court could not observe the behavior of the deponent does not justify the denial of the
right to take deposition.
o To hold otherwise would result in a situation where no deposition could ever be taken, said objection
being common to all depositions. Such would nullify the right to take depositions.
o In the absence of proof, the allegation that PET merely intended to annoy, harass or oppress the Teope
cannot ably support the setting aside of a notice to take deposition. The fact that the deposition would be
taken in San Pablo City while Teope lives in Manila is not sufficient to establish the same.

DISPOSITIVE: petition GRANTED. CA REVERSED and SET ASIDE. RTC ORDERED to allow PET to take the deposition upon
oral examination of Teope.