Fortune Corporation v . CA and Inter-Merchants Corporation Date: January 19, 1994 Ponente: Regalado, J.

Nature: Petition for Review on Certiorari of CA Decision Summary/Doctrine: It is only upon notice and for good cause shown that the court may order that the deposition not be taken. A particular and specific demonstration of facts is required to establish good cause for the issuance of a protective order. The mere fact that the information sought by the deposition has already been obtained through a bill of particulars, interrogatories or other deposition is not a sufficient ground for such an order. Neither is such good cause shown by the availability of proposed deponent to testify in court nor by the mere allegation, without proof, that the deposition is being taken in bad faith. Facts: An action for breach of contract was filed by petitioner Fortune Corporation (Fortune) against respondent Inter-Merchants Corporation (Inter-Merchants) before the RTC of San Pablo City. After Inter-Merchants had filed its Answer, petitioner served the former with written interrogatories pursuant to Rule 25 of the Rules of Court. The interrogatories were answered by Inter-Merchants through its board chairman, Juanito A. Teope. The pre-trial conference was scheduled for January 9, February 12 and April 22, 1992. However, on March 26, 1992, petitioner served upon private respondent a Notice to Take Deposition Upon Oral Examination notifying the latter that on April 7, 1992, at San Pablo City, herein petitioner would take the deposition of said Juanito A. Teope, in accordance with Section 15, Rule 24. Inter-Merchants filed an Urgent Motion Not To Take Deposition/Vehement Opposition to Plaintiff's Notice to Take Deposition Upon Oral Examination, dated March 27, 1992, alleging that : (a) herein petitioner has previously availed of one mode of discovery, that is, the written interrogatories which practically covered all the claims, counterclaims and defenses in the case; (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, Juanito A. Teope; (d) Mr. Teope has no intention of leaving the country; and (e) the intended deponent is available to testify in open court if required during the trial on the merits. The RTC ruled in favor of respondent Inter-Merchants stating that the deposition of Juanito A. Teope appears unwarranted since the proposed deponent had earlier responded to the written interrogatories of the plaintiff and has signified his availability to testify in cour and to allow the deposition will deprive the Court of the opportunity to ask clarificatory questions, if any, on the proposed deponent who appears to be a vital witness. Its motion for reconsideration having been denied, petitioner filed an original action for certiorari before the Supreme Court but this case was referred to the Court of Appeals for consideration and adjudication on the merits. The CA dismissed the petition, affirming the ruling of the RTC Hence, the present petition. Issues/Held: (1) (Threshold issue) Whether certiorari is the proper remedy in this case (not appeal as CA ruled). YES, certiorari is the proper remedy. (2) Whether the TC gravely abused its discretion in ruling that the deposition not be taken in the absence of good cause and the reasons advanced by TC cannot be considered good cause YES (Sub-issue: (a) Whether a party who has resorted to a particular mode of discovery will be barred in subsequently using other discovery devices. NO ) [(On the reason behind discovery proceedings )] The deposition discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial function of notice-giving, issue-formulation and fact revelation 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. To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as witness to testify orally at trial. The inquiry extends to all facts which are relevant, whether they be ultimate or evidentiary, expecting 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 Sec. 2, Rule 24 (governing depositions ) 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. Ratio: (1) Although the general rule is that certiorari will not lie to review a discretionary order of any tribunal and is only available to review final judgment or decrees and not to review or correct discovery orders (such as depositions in Sec, 16, Rule 24) which are merely interlocutory and not appealable, this is subject to the exception that discretionary acts will be reviewed where the lower court or tribunal has acted without or in excess of its jurisdiction. (2) Section 16, Rule 24 clearly states that it is only upon notice and for good cause shown that the court may order that the deposition shall not be taken. Petitioner (Fortune Corp.) asserts that the reasons advanced by the trial court cannot be considered good cause. These reasons are: (a) that the proposed deponent has earlier responded to written interrogatories; (b) that the proposed deponent has signified his availability to testify in court; (c) that to allow the deposition would deprive the TC of the opportunity to ask clarificatory questions to a vital witness. The SC agrees fully with the petitioners position. First, they defined good cause as a substantial reason one that affords a legal excuse. However, whether or not substantial reasons exist is for the court to determine, as there is no hard and fast rule for determining the question as to what is meant by the term "for good cause shown." A particular and specific demonstration of facts is required to establish good cause for the issuance of a protective order. In the decision, the SC pointed out that the TC failed to sufficiently establish good cause in the case and they pointed this out in detail by evaluating each of the reasons set forth by the TC why the deposition shall not be taken. (A) The SC agrees with the petitioner's submission that the fact that petitioner had previously availed of the mode of discovery, which is by written interrogatories supposedly covering all claims, counterclaims and defenses in the case, cannot be considered "good cause", because: (a) 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; and (b) knowledge of the facts by the petitioner concerning which the proposed deponent is to be examined does not justify a refusal of such examination. 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. Further, it cannot be disputed that the various methods of discovery as provided for in the Rules are clearly intended to be cumulative, as opposed to alternative or mutually exclusive. A lot of cases have already resolved the issue of whether a party who has resorted to a particular method of discovery will be barred in subsequently using other discovery devices and ruled in the negative. Howard v. States Marine Corp: Where it develops that examination by interrogatories has been inadequate, the court unquestionably has, and in a proper case should exercise, discretion to permit an oral examination. But it should be made to clearly appear that the relevant subject matter will not involve the interrogation of the witness with respect to those particulars upon which he was examined by interrogatories. Canuso v. City of Niagara Falls - the fact that a bill of particulars had previously been served and interrogatories answered was held no objection to an oral examination since no duplication was involved and bad faith had not been shown. Alfred Bell & Co. v. Catalda Fine Arts, Inc. - oral examination was allowed, even though the individual had previously answered interrogatories, except as to matters with respect to which he had "given responsive and categorical testimony." Basically, under the present Rules the fact that a party has resorted to a particular method of discovery will not bar subsequent use of other discovery devices, as long as the party is not attempting to circumvent a ruling of the court, or to harass or oppress the other party.

In fact, as a matter of practice, it will often be desirable to resort to both interrogatories and depositions in one or the other sequence for reasons of efficiency and effectiveness (with the only advantage of interrogatories over depositions being cost).

(B) Next, 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 judicial picture. Although preference for oral testimony has dictated most of the limitations on the use of depositions as evidence and their use as evidence was originally conceived as the sole function of depositions proper, the limitations on their taking dovetailed with the limitations on their use. But under 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. (C) The SC also agrees with the petitioner that the mere fact that the court could not thereby observe the behavior of the deponent does not justify the denial of the right to take deposition. If we follow the lower courts logic that if the deposition were taken, the court could not observe the behavior of the deponents, then no deposition could ever be taken, said objection or handicap being common to all depositions alike. In other words, the order of respondent Judge cannot be sustained without nullifying the right to take depositions, and therefore, without, in effect repealing section 1 of Rule 18 (now Rule 24) of the Rules of Court, which, clearly, was not intended by the framers of section 16 of the same rule. (D) Finally( on the allegation of bad faith), in the absence of proof, the allegation that petitioner merely intended to annoy, harass or oppress the proposed deponent cannot ably support the setting aside of a notice to take deposition. Further, even if it were true, orders to protect the party or witness from annoyance, embarrassment or oppression may be issued if the following requirements are complied with: (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. Inconvenience to the party whose deposition is to be taken is not a valid objection to the taking of his deposition. The mere fact that an officer of private respondent would be required to attend the examination and thereby absent himself from some of his usual business affairs during the taking of the deposition is utterly insufficient to justify the court in ruling that he is being annoyed, embarrassed or oppressed, within the meaning of this language. Something far beyond this is required in this connection to grant a party relief. At any rate, petitioner has signified its willingness to select a suitable office in Manila for the taking of the deposition in order to accommodate the proposed deponent.