FIRST DIVISION

[G.R. No. 147143. March 10, 2006.]

HYATT INDUSTRIAL MANUFACTURING CORP., and YU HE

CHING, petitioners, vs. LEY CONSTRUCTION AND
DEVELOPMENT CORP., and PRINCETON DEVELOPMENT
CORP., respondents.

DECISION

AUSTRIA-MARTINEZ, J : p

Before the Court is a petition for review on certiorari seeking the

nullification of the Decision dated May 4, 2000 of the Court of Appeals' (CA)
then Seventh Division in CA-G.R. CV No. 57119, which remanded Civil Case
No. 94-1429 to the trial court and directed the latter to allow the deposition-
taking without delay; 1 and the CA Resolution dated February 13, 2001 which
denied petitioners' motion for reconsideration. 2
The facts are as follows:
On April 8, 1994, respondent Ley Construction and Development
Corporation (LCDC) filed a complaint for specific performance and damages
with the Regional Trial Court of Makati, Branch 62 (RTC), docketed as Civil
Case No. 94-1429, against petitioner Hyatt Industrial Manufacturing
Corporation (Hyatt) claiming that Hyatt reneged in its obligation to transfer
40% of the pro indiviso share of a real property in Makati in favor of LCDC
despite LCDC's full payment of the purchase price of P2,634,000.00; and
that Hyatt failed to develop the said property in a joint venture, despite
LCDC's payment of 40% of the pre-construction cost. 3 On April 12, 1994,
LCDC filed an amended complaint impleading Princeton Development
Corporation (Princeton) as additional defendant claiming that Hyatt sold the
subject property to Princeton on March 30, 1994 in fraud of LCDC. 4 On
September 21, 1994, LCDC filed a second amended complaint adding as
defendant, Yu He Ching (Yu), President of Hyatt, alleging that LCDC paid the
purchase price of P2,634,000.00 to Hyatt through Yu. 5
Responsive pleadings were filed and LCDC filed notices to take the
depositions of Yu; Pacita Tan Go, Account Officer of Rizal Commercial
Banking Corporation (RCBC); and Elena Sy, Finance Officer of Hyatt. Hyatt
also filed notice to take deposition of Manuel Ley, President of LCDC, while
Princeton filed notice to take the depositions of Manuel and Janet Ley. 6
On July 17, 1996, the RTC ordered the deposition-taking to proceed. 7
At the scheduled deposition of Elena Sy on September 17, 1996, Hyatt
and Yu prayed that all settings for depositions be disregarded and pre-trial
be set instead, contending that the taking of depositions only delay the
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 resolution of the case. The RTC agreed and on the same day ordered all
depositions cancelled and pre-trial to take place on November 14, 1996. 8
LCDC moved for reconsideration 9 which the RTC denied in its October
14, 1996 Order, portion of which reads:
This Court has to deny the motion, because: 1) as already
pointed out by this Court in the questioned Order said depositions will
only delay the early termination of this case; 2) had this Court set this
case for pre-trial conference and trial thereafter, this case would have
been terminated by this time; 3) after all, what the parties would like to
elicit from their deponents would probably be elicited at the pre-trial
conference; 4) no substantial rights of the parties would be prejudiced,
if pre-trial conference is held, instead of deposition. 10

On November 14, 1996, the scheduled date of the pre-trial, LCDC filed
an Urgent Motion to Suspend Proceedings Due to Pendency of Petition for
Certiorari in the Court of Appeals. 11 The petition, which sought to annul the
Orders of the RTC dated September 17, 1996 and October 14, 1996, was
docketed as CA-G.R. SP No. 42512 12 and assigned to the then Twelfth
Division of the CA.
Meanwhile, pre-trial proceeded at the RTC as scheduled 13 and with the
refusal of LCDC to enter into pre-trial, Hyatt, Yu and Princeton moved to
declare LCDC non-suited which the RTC granted in its Order dated December
3, 1996, thus:
On September 17, 1996, this Court noticing that this case was
filed as early (as) April 4, 1994 14 and has not reached the pre-trial
stage because of several depositions applied for by the parties, not to
mention that the records of this case has reached two (2) volumes, to
avoid delay, upon motion, ordered the cancellation of the depositions.

On September 24, 1996, plaintiff filed a motion for

reconsideration, seeking to reconsider and set aside the order dated
September 17, 1996, which motion for reconsideration was denied in
an order dated October 14, 1996, ruling among others that "after all,
what the parties would like to elicit from these deponents would
probably be elicited at the pre-trial conference", and, reiterated the
order setting this case for pre-trial conference on November 14, 1996.
On the scheduled pre-trial conference on November 14, 1996, a
petition for certiorari was filed with the Court of Appeals, seeking to
annul the Order of this Court dated September 17, 1996 and October
14, 1996, furnishing this Court with a copy on the same date.

At the scheduled pre-trial conference on November 14, 1996,

plaintiff orally moved the Court to suspend pre-trial conference alleging
pendency of a petition with the Court of Appeals and made it plain that
it cannot proceed with the pre-trial because the issue on whether or
not plaintiff may apply for depositions before the pre-trial conference is
a prejudicial question. Defendants objected, alleging that even if the
petition is granted, pre-trial should proceed and that plaintiff could take
deposition after the pre-trial conference, insisting that defendants are
ready to enter into a pre-trial conference.
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 This Court denied plaintiff's motion to suspend proceedings and
ordered plaintiff to enter into pre-trial conference. Plaintiff refused.
Before this Court denied plaintiff's motion to suspend, this Court gave
Plaintiff two (2) options: enter into a pre-trial conference, advising
plaintiff that what it would like to obtain at the deposition may be
obtained at the pre-trial conference, thus expediting early termination
of this case; and, terminate the pre-trial conference and apply for
deposition later on. Plaintiff insisted on suspension of the pre-trial
conference alleging that it is not ready to enter into pre-trial
conference in view of the petition for certiorari with the Court of
Appeals. Defendants insisted that pre-trial conference proceed as
scheduled, manifesting their readiness to enter into a pre-trial
conference.

When plaintiff made it clear that it is not entering into the pre-
trial conference, defendants prayed that plaintiff be declared non-
suited. . . .

xxx xxx xxx

In the light of the foregoing circumstances, this Court is

compelled to dismiss plaintiff's complaint.
WHEREFORE, for failure of plaintiff to enter into pre-trial
conference without any valid reason, plaintiff's complaint is dismissed.
Defendants' counterclaims are likewise dismissed.

SO ORDERED. 15

LCDC filed a motion for reconsideration 16 which was denied however

by the trial court in its Order dated April 21, 1997. 17 LCDC went to the CA on
appeal which was docketed as CA-G.R. CV No. 57119 and assigned to the
then Seventh Division of the CA. 18
On July 24, 1997, the CA's then Twelfth Division, 19 in CA-G.R. SP No.
42512 denied LCDC's petition for certiorari declaring that the granting of the
petition and setting aside of the September 17, 1996 and October 14, 1996
Orders are manifestly pointless considering that the complaint itself had
already been dismissed and subject of the appeal docketed as CA-G.R. CV
No. 57119; that the reversal of the said Orders would have practical effect
only if the dismissal were also set aside and the complaint reinstated; and
that the dismissal of the complaint rendered the petition for certiorari devoid
of any practical value. 20 LCDC's motion for reconsideration of the CA-G.R. SP
No. 42512 decision was denied on March 4, 1998. 21 LCDC then filed with
this Court, a petition for certiorari, docketed as G.R. No. 133145 which this
Court dismissed on August 29, 2000. 22
On May 4, 2000, the CA's then Seventh Division issued in CA-G.R. CV
No. 57119 the herein assailed decision, the fallo of which reads:
WHEREFORE, premises considered, finding the appeal
meritorious, this case is remanded to the court a quo for further
hearing and directing the latter to allow the deposition taking without
delay. cEaSHC

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 SO ORDERED. 23

The CA reasoned that: LCDC complied with Section 1, Rule 23 of the

1997 Rules of Civil Procedure which expressly sanctions depositions as a
mode of discovery without leave of court after the answer has been served;
to unduly restrict the modes of discovery during trial would defeat the very
purpose for which it is intended which is a pre-trial device, and at the time of
the trial, the issues would already be confined to matters defined during pre-
trial; the alleged intention of expediting the resolution of the case is not
sufficient justification to recall the order to take deposition as records show
that the delay was brought about by postponement interposed by both
parties and other legal antecedents that are in no way imputable to LCDC
alone; deposition-taking, together with the other modes of discovery are
devised by the rules as a means to attain the objective of having all the facts
presented to the court; the trial court also erred in dismissing the complaint
as LCDC appeared during the pre-trial conference and notified it of the filing
of a petition before the CA; such is a legitimate justification to stall the pre-
trial conference, as the filing of the petition was made in good faith in their
belief that the court a quo erred in canceling the deposition scheduled for no
apparent purpose. 24
Hyatt and Princeton filed their respective motions for reconsideration
which the CA denied on February 13, 2001. 25
Hyatt and Yu now come before the Court via a petition for review on
certiorari, on the following grounds:

I
THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE
ABUSE OF DISCRETION, ACTUALLY AMOUNTING TO LACK OF
JURISDICTION, IN HOLDING IN EFFECT INVALID THE ORDERS OF THE
LOWER COURT DATED SEPTEMBER 17, 1996 AND OCTOBER 14, 1996
WHICH ARE NOT RAISED OR PENDING BEFORE IT, BUT IN ANOTHER
CASE (CA-G.R. SP. No. 42512) PENDING BEFORE ANOTHER DIVISION OF
THE COURT OF APPEALS, TWELFTH DIVISION, AND WHICH CASE WAS
DISMISSED BY THE SAID DIVISION OF THE COURT OF APPEALS AND
FINALLY BY THE HONORABLE SUPREME COURT IN G.R. NO. 133145.
II

THE COURT OF APPEALS, SEVENTH DIVISION, COMMITTED GRAVE

ABUSE OF DISCRETION AND SERIOUS ERRORS OF LAW IN REVERSING
THE LOWER COURT'S ORDER DATED DECEMBER 3, 1996 AND APRIL
21, 1997 HOLDING RESPONDENT NON-SUITED FOR FAILURE TO ENTER
INTO PRE-TRIAL. 26

Anent the first issue, petitioners claim that: the validity of the RTC
Order dated September 17, 1996 which set the case for pre-trial, as well as
its Order dated October 14, 1996 denying LCDC's motion for partial
reconsideration are not involved in CA-G.R. CV No. 57119 but were the
subject of CA-G.R. SP No. 42512, assigned to the then Twelfth Division,
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 which dismissed the same on July 24, 1997 and which dismissal was affirmed
by this Court in G.R. No. 133145; in passing upon the validity of the Orders
dated September 17, 1996 and October 14, 1996, the CA's then Seventh
Division in CA-G.R. CV No. 57119 exceeded its authority and encroached on
issues taken cognizance of by another Division. 27
On the second issue, petitioners claim that: the CA's then Seventh
Division should have outrightly dismissed the appeal of LCDC as the same
did not involve any error of fact or law but pertains to a matter of discretion
which is properly a subject of certiorari under Rule 65 of the Revised Rules of
Court; conducting discovery thru deposition is not a condition sine qua non
to the holding of a pre-trial and the fact that LCDC wanted to take the
deposition of certain persons is not a valid ground to suspend the holding of
pre-trial and subsequently the trial on the merits; the persons whose
depositions were to be taken were listed as witnesses during the trial; to
take their depositions before the lower court and to present them as
witnesses during the trial on the merits would result in unnecessary
duplicity; the fact that LCDC has a pending petition for certiorari with the
CA's then Twelfth Division docketed as CA-G.R. SP No. 42512 is not a ground
to cancel or suspend the scheduled pre-trial on November 14, 1996 as there
was no restraining order issued; LCDC's availment of the discovery
procedure is causing the undue delay of the case; it is only after LCDC has
filed its complaint that it started looking for evidence to support its
allegations thru modes of discovery and more than two years has already
passed after the filing of the complaint yet LCDC still has no documentary
evidence to present before the lower court to prove its allegations in the
complaint. 28
Petitioners then pray that the Decision dated May 4, 2000 and the
Resolution dated February 13, 2001 of the CA's then Seventh Division in CA-
G.R. CV No. 57119 be annulled and set aside and the validity of the Orders
dated December 3, 1996 and April 21, 1997 of the RTC of Makati, Branch 62
in Civil Case No. 94-1429 be sustained. 29
In its Comment, LCDC argues that the petitioners erred in claiming that
the CA's then Seventh Division overstepped its authority as this Court has
ruled in G.R. No. 133145 that the issue of whether LCDC has been denied its
right to discovery is more appropriately addressed in the appeal before the
then Seventh Division in CA-G.R. CV No. 57119 below rather than by the
then Twelfth Division in the certiorari proceeding in CA-G.R. SP No. 42512;
and while the appeal of the final Order of the RTC dated December 3, 1996
also questioned the Orders dated September 17, 1996 and October 14, 1996,
it does not render the appeal improper as this Court in G.R. No. 133145 held
that the subsequent appeal constitutes an appropriate remedy because it
assails not only the Order dated December 3, 1996, but also the two earlier
orders. 30
On the second issue, LCDC contends that: the mere fact that a
deponent will be called to the witness stand during trial is not a ground to
deny LCDC the right to discovery and does not cause "unnecessary
duplicity", otherwise no deposition can ever be taken; a deposition is for the
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 purpose of "discovering" evidence while trial is for the purpose of
"presenting" evidence to the court; if petitioners' concern was the delay in
the disposition of the case, the remedy is to expedite the taking of the
depositions, not terminate them altogether; petitioners have nothing to fear
from discovery unless they have in their possession damaging evidence; the
parties should be allowed to utilize the discovery process prior to conducting
pre-trial since every bit of relevant information unearthed through the
discovery process will hasten settlement, simplify the issues and determine
the necessity of amending the pleadings; the trial court erred in not
suspending the pre-trial conference pending the petition for certiorari before
the then Twelfth Division of the CA since considerations of orderly
administration of justice demanded that the trial court accord due deference
to the CA; not only was LCDC's petition for certiorari filed in good faith, the
CA found it meritorious, vindicating LCDC's insistence that the pre-trial be
suspended; the undue delay in the disposition of the case was not
attributable to LCDC's deposition-taking but to the flurry of pleadings filed by
defendants below to block LCDC's depositions and prevent it from gaining
access to critical evidence; the critical evidence that LCDC needs to obtain
through discovery is evidence that is totally within the knowledge and
possession of petitioners and defendant Princeton and is not available
elsewhere. 31
On September 17, 2001, the Court required the parties to file their
respective memoranda. 32 Hyatt and Yu on the one hand and LCDC on the
other filed their respective memoranda reiterating their positions. 33
On January 2, 2002, Princeton filed a "Comment" which this Court
considered as its Memorandum in the Resolution dated January 30, 2002. 34
In said memorandum, Princeton averred that: it is not true that
Princeton failed to comply with any discovery orders as all information
requested of Princeton was duly furnished LCDC and there are no pending
discovery orders insofar as Princeton is concerned; LCDC is seeking to
dictate its procedural strategies on the RTC and the opposing parties; LCDC
was not deprived due process as it was given all the opportunity to prepare
for its case and to face its opponents before the court; LCDC admits to the
probability of forum shopping as it filed a petition for certiorari with the then
Twelfth Division of the CA and later an appeal with the then Seventh Division
of the CA; the RTC did not bar LCDC from presenting witnesses or
discovering any evidence, as all it did was to transfer the venue of the
testimony and discovery to the courtroom and get on with the case which
LCDC did not want to do; that discovery proceedings need not take place
before pre-trial conference; trial court judges are given discretion over the
right of parties in the taking of depositions and may deny the same for good
reasons in order to prevent abuse; the trial court did not err in not granting
LCDC's motion to suspend proceedings due to the pendency of a petition for
certiorari with the CA since there was no order from said court and there
was no merit in the petition for certiorari as shown by the dismissal thereof
by the then Twelfth Division; there was proper and legal ground for the trial
court to declare LCDC non-suited; appearance at the pre-trial is not enough;
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 there is no evidence to support LCDC's claim that Hyatt surreptitiously
transferred title to Princeton. 35
The Court is in a quandary why Hyatt and Yu included Princeton as
respondent in the present petition when Princeton was their co-defendant
below and the arguments they raised herein pertain only to LCDC. With the
failure of petitioners to raise any ground against Princeton in any of its
pleadings before this Court, we shall treat Princeton's inclusion as
respondent in the present petition as mere inadvertence on the part of
petitioners. EaScHT

Now to the merits. The issues that need to be resolved in this case may
be simplified as follows: (1) Whether the CA's then Seventh Division
exceeded its authority in ruling upon the validity of the Orders dated
September 17, 1996 and November 14, 1996; and (2) Whether the CA erred
in remanding the case to the trial court and order the deposition-taking to
proceed.
We answer both questions in the negative.
Petitioners assert that the CA's then Twelfth Division in CA-G.R. SP No.
42512 and this Court in G.R. No. 133145 already ruled upon the validity of
the Orders dated September 17, 1996 and November 14, 1996, thus the CA's
then Seventh Division in CA G.R. CV No. 57119 erred in ruling upon the
same.
A cursory reading of the decisions in CA-G.R. SP No. 42512 and G.R.
No. 133145, however, reveals otherwise. The CA's then Twelfth Division in
CA-G.R. SP No. 42512 was explicit in stating thus:
. . . Any decision of ours will not produce any practical legal
effect. According to the petitioner, if we annul the questioned Orders,
the dismissal of its Complaint by the trial [court] will have to be set
aside in its pending appeal. That assumes that the division handling
the appeal will agree with Our decision. On the other hand, it may not.
Also other issues may be involved therein than the validity of the
herein questioned orders.
We cannot pre-empt the decision that might be rendered in such
appeal. The division to [which] it has been assigned should be left free
to resolve the same. On the other hand, it is better that this Court
speak with one voice. 36

This Court in G.R. No. 133145 also clearly stated that:

. . . First, it should be stressed that the said Petition (CA-G.R. SP
No. 42512) sought to set aside only the two interlocutory RTC Orders,
not the December 3, 1996 Resolution dismissing the Complaint. Verily,
the Petition could not have assailed the Resolution, which was issued
after the filing of the former.
Under the circumstances, granting the Petition for Certiorari and
setting aside the two Orders are manifestly pointless, considering that
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 the Complaint itself had already been dismissed. Indeed, the reversal
of the assailed Orders would have practical effect only if the dismissal
were also set aside and the Complaint reinstated. In other words, the
dismissal of the Complaint rendered the Petition for Certiorari devoid of
any practical value.
Second, the Petition for Certiorari was superseded by the filing,
before the Court of Appeals, of a subsequent appeal docketed as CA-
G.R. CV No. 57119, questioning the Resolution and the two Orders. In
this light, there was no more reason for the CA to resolve the Petition
for Certiorari.
xxx xxx xxx

In this case, the subsequent appeal constitutes an adequate

remedy. In fact, it is the appropriate remedy, because it assails not
only the Resolution but also the two Orders.
xxx xxx xxx
WHEREFORE, the Petition is DENIED and the assailed Resolutions
AFFIRMED. . . . . 37

With the pronouncements of the CA in CA-G.R. SP No. 42512 and by

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

As correctly observed by the CA, LCDC complied with the above quoted
provision as it made its notice to take depositions after the answers of the
defendants have been served. LCDC having complied with the rules then
prevailing, the trial court erred in canceling the previously scheduled
depositions.
While it is true that depositions may be disallowed by trial courts if the
examination is conducted in bad faith; or in such a manner as to annoy,
embarrass, or oppress the person who is the subject of the inquiry, or when
the inquiry touches upon the irrelevant or encroaches upon the recognized
domains of privilege, 44 such circumstances, however are absent in the case
at bar.
The RTC cites the delay in the case as reason for canceling the
scheduled depositions. While speedy disposition of cases is important, such
consideration however should not outweigh a thorough and comprehensive
evaluation of cases, for the ends of justice are reached not only through the
speedy disposal of cases but more importantly, through a meticulous and
comprehensive evaluation of the merits of the case. 45 Records also show
that the delay of the case is not attributable to the depositions sought by
LCDC but was caused by the many pleadings filed by all the parties including
petitioners herein.
The argument that the taking of depositions would cause unnecessary
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 duplicity as the intended deponents shall also be called as witnesses during
trial, is also without merit. THIcCA

The case of Fortune Corp. v. Court of Appeals 46 which already settled

the matter, explained that:
The availability of the proposed deponent to testify in court does
not constitute "good cause" to justify the court's order that his
deposition shall not be taken. That the witness is unable to attend or
testify is one of the grounds when the deposition of a witness may be
used in court during the trial. But the same reason cannot be
successfully invoked to prohibit the taking of his deposition.

The right to take statements and the right to use them in court
have been kept entirely distinct. The utmost freedom is allowed in
taking depositions; restrictions are imposed upon their use. As a result,
there is accorded the widest possible opportunity for knowledge by
both parties of all the facts before the trial. Such of this testimony as
may be appropriate for use as a substitute for viva voce examination
may be introduced at the trial; the remainder of the testimony, having
served its purpose in revealing the facts to the parties before trial,
drops out of the judicial picture.

. . . [U]nder the concept adopted by the new Rules, the

deposition serves the double function of a method of discovery — with
use on trial not necessarily contemplated — and a method of
presenting testimony. Accordingly, no limitations other than relevancy
and privilege have been placed on the taking of depositions, while the
use at the trial is subject to circumscriptions looking toward the use of
oral testimony wherever practicable. 47

Petitioner also argues that LCDC has no evidence to support its claims
and that it was only after the filing of its Complaint that it started looking for
evidence through the modes of discovery.
On this point, it is well to reiterate the Court's pronouncement in
Republic v. Sandiganbayan 48 :
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. 49

It also does not escape this Court's attention that the trial court, before
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 dismissing LCDC's complaint, gave LCDC two options: (a) enter into a pre-
trial conference, advising LCDC that what it would like to obtain at the
deposition may be obtained at the pre-trial conference, thus expediting early
termination of the case; and (b) terminate the pre-trial conference and apply
for deposition later on. The trial court erred in forcing LCDC to choose only
from these options and in dismissing its complaint upon LCDC's refusal to
choose either of the two.

The information LCDC seeks to obtain through the depositions of Elena

Sy, the Finance Officer of Hyatt and Pacita Tan Go, an Account Officer of
RCBC, may not be obtained at the pre-trial conference, as the said
deponents are not parties to the pre-trial conference.
As also pointed out by the CA:
. . . To unduly restrict the modes of discovery during trial, would
defeat the very purpose for which it is intended, as a pre-trial device.
By then, the issues would have been confined only on matters defined
during pre-trial. The importance of the modes of discovery cannot be
gainsaid in this case in view of the nature of the controversy involved
and the conflicting interest claimed by the parties. 50

Deposition is chiefly a mode of discovery, the primary function of which

is to supplement the pleadings for the purpose of disclosing the real matters
of dispute between the parties and affording an adequate factual basis
during the preparation for trial. 51
Further, in Republic v. Sandiganbayan 52 the Court explained that:
The truth is that "evidentiary matters" may be inquired into and
learned by the parties before the trial. Indeed, it is the purpose and
policy of the law that the parties — before the trial if not
indeed even before the pre-trial — should discover or inform
themselves of all the facts relevant to the action, not only
those known to them individually, but also those known to
their adversaries; in other words, the desideratum is that civil
trials should not be carried on in the dark; and the Rules of Court
make this ideal possible through the deposition- discovery mechanism
set forth in Rules 24 to 29. The experience in other jurisdictions has
been the ample discovery before trial, under proper regulation,
accomplished one of the most necessary ends of modern procedure; it
not only eliminates unessential issues from trials thereby shortening
them considerably, but also requires parties to play the game with the
cards on the table so that the possibility of fair settlement before trial
is measurably increased.
As just intimated, the deposition-discovery procedure was
designed to remedy the conceded inadequacy and cumbersomeness of
the pre-trial functions of notice-giving, issue-formulation and fact
revelation theretofore performed primarily by the pleadings.

The various modes or instruments of discovery are meant to

serve (1) as a device, along with the pre-trial hearing under Rule 20, to
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 narrow and clarify the basic issues between the parties, and (2) as a
device for ascertaining the facts relative to those issues. The evident
purpose is, to repeat, to enable the parties, consistent with recognized
privileges, to obtain the fullest possible knowledge of the issues and
facts before civil trials and thus prevent that said trials are carried on
in the dark. 53 (emphasis supplied)

In this case, the information sought to be obtained through the

depositions of Elena and Pacita are necessary to fully equip LCDC in
determining what issues will be defined at the pre-trial. Without such
information before pre-trial, LCDC will be forced to prosecute its case in the
dark — the very situation which the rules of discovery seek to prevent.
Indeed, the rules on discovery seek to make trial less a game of blind man's
bluff and more a fair contest with the basic issues and facts disclosed to the
fullest practicable extent. 54
Considering the foregoing, the Court finds that the CA was correct in
remanding the case to the trial court and ordering the depositions to
proceed.
WHEREFORE, the petition is denied for lack of merit.
Costs against petitioner.
SO ORDERED.
Panganiban, C.J., Ynares-Santiago, Callejo, Sr. and Chico-Nazario, JJ.,
concur.

Footnotes
1. Rollo , pp. 40-49, penned by Associate Justice Corona Ibay-Somera and
concurred in by Associate Justices Portia Aliño-Hormachuelos and Elvi John S.
Asuncion.
2. Id. at 51-52.
3. Records, pp. 1-6. See also CA Decision in CA G.R. CV No. 57119, rollo, p. 41.

4. Id. at 40-46.
5. Id. at 133-140.
6. Id. at 553-557, 567, 613.
7. Id. at 745-747.
a. for Elena C. Sy, (by plaintiff) on September 17, 1996 at 2:00 o'clock in the
afternoon;

b. for Manuel Ley (by defendant Hyatt) on September 24, 1996 at 2:00
o'clock in the afternoon.

c. for Yu He Ching (by plaintiff) on September 26, 1996 at 2:00 p.m.

d. for Manuel Ley and Janet Ley (by defendant Princeton) on October 1, 1996
at 2:00 p.m.
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 e. for Pacita Tan Go (by plaintiff) on October 3, 1996 at 2:00 p.m.
8. Id. at 785.
The fallo of which reads:
"WHEREFORE, in order not to delay the early termination of this case, all
depositions set for hearing are hereby cancelled and set this case for Pre-
trial on November 14, 1996 at 2:00 o'clock in the afternoon."

9. Id. at 790-796.
10. Id. at 808.
11. Id. at 815-818.
12. Ley Construction & Development Corp. v. Hyatt Industrial Manufacturing
Corp., 393 Phil. 633, 636-638 (2000). See also Petition, rollo, pp. 13-14.
13. Records, at 836, December 3, 1996 RTC Order.

14. Should be "April 8, 1994."

15. Records, pp. 835-837.

16. Id. at 838-847.

17. Id. at 872-873.
18. Rollo , p. 40.
19. Penned by Justice Hector L. Hofileña, with the concurrence of Justices
Artemon D. Luna and Artemio G. Tuquero.
20. Ley Construction v. Hyatt, supra note 12, at 640.
21. Id. at 636.
22. Ley Construction v. Hyatt, supra note 12.
23. Rollo , pp. 48-49.
24. Id. at 44-49.
25. Id. at 51-52.
26. Id. at 16-17.
27. Id. at 17-20.
28. Id. at 20-24.
29. Id. at 24.
30. Id. at 60-63.
31. Id. at 63-77.
32. Id. at 82-83.
33. Id. at 97-110; 112-168.

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 34. Id. at 187.
35. Id. at 170-186.
36. Ley Construction v. Hyatt, supra note 12, at 638-639.
37. Id. at 640-643.
38. Jonathan Landoil International Co. Inc. v. Mangudadatu, G.R. No. 155010,
August 16, 2004, 436 SCRA 559, 575.

39. Ayala Land, Inc. v. Tagle, G.R. No. 153667, August 11, 2005, 466 SCRA 521,
532; Jonathan Landoil v. Mangudadatu, supra, at 573.
40. Jonathan Landoil v. Mangudadatu, supra, at 574.
41. Id., See also Secs. 1 & 4 of Rule 23 of the Rules of Court.
42. Ayala Land, Inc. v. Tagle, supra at 531.
43. A.M. No. 03-1-09-SC, pars. I.A. 1.2; 2(e).

44. Jonathan Landoil v. Mangudadatu, supra, at 573.

45. Dulay v. Dulay, G.R. No. 158857, November 11, 2005.
46. G.R. No. 108119, January 19, 1994, 229 SCRA 355.

47. Id. at 376-377.

48. G.R. No. 90478, November 21, 1991, 204 SCRA 212.

49. Id. at 224.

50. Rollo , pp. 45-46.
51. Dulay v. Dulay, supra; Ayala Land v. Tagle, supra at 530; Jonathan Landoil
v. Mangudadatu, supra, at 573.
52. Supra note 48.
53. Id. at 222-223.
54. Fortune Corp. v. Court of Appeals, supra at 363.

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