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Hyatt Industrial Manufacturing Corp. v. Ley
Hyatt Industrial Manufacturing Corp. v. Ley
DECISION
AUSTRIA-MARTINEZ, J : p
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.
When plaintiff made it clear that it is not entering into the pre-
trial conference, defendants prayed that plaintiff be declared non-
suited. . . .
SO ORDERED. 15
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
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
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 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.
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.
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.
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.
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).