Afulgencia vs Metrobank

G. R. No. 185145, Feb. 5, 2014

SPOUSES VICENTE AFULUGENCIA and LETICIA AFULUGENCIA, Petitioners,

vs.

METROPOLITAN BANK & TRUST CO. and EMMANUEL L. ORTEGA, Clerk of Court, Regional Trial Court and Ex-Officio Sheriff, Province of Bulacan, Respondents.

Petitioners, spouses Vicente and Leticia Afulugencia, filed a Complaint for nullification of mortgage, foreclosure, auction sale, certificate of sale and other documents, with damages, against respondents Metropolitan Bank & Trust Co. (Metrobank) and Emmanuel L. Ortega (Ortega) before the Regional Trial Court (RTC) of Malolos City

Metrobank is a domestic banking corporation existing under Philippine laws, while Ortega is the Clerk of Court and Ex-Officio Sheriff of the Malolos RTC.

After the filing of the parties’ pleadings and with the conclusion of pre-trial, petitioners filed a Motion for Issuance of Subpoena Duces Tecum Ad Testificandum to require Metrobank’s officers to appear and testify as the petitioners’ initial witnesses during the August 31, 2006 hearing for the presentation of their evidence-in-chief, and to bring the documents relative to their loan with Metrobank, as well as those covering the extrajudicial foreclosure and sale of petitioners’ 200-square meter land in Meycauayan, Bulacan covered by Transfer Certificate of Title No. 20411.

Metrobank filed an Opposition arguing that for lack of a proper notice of hearing, the Motion must be denied; that being a litigated motion, the failure of petitioners to set a date and time for the hearing renders the Motion ineffective and pro forma; that pursuant to Sections 1 and 611 of Rule 25 of the Rules, Metrobank’s officers – who are considered adverse parties – may not be compelled to appear and testify in court for the petitioners since they were not initially served with written interrogatories; that petitioners have not shown the materiality and relevance of the documents sought to be produced in court; and that petitioners were merely fishing for evidence.

Petitioners submitted a Reply  stating that the lack of a proper notice of hearing was cured by the filing of Metrobank’s Opposition; that applying the principle of liberality, the defect may be ignored; that leave of court is not necessary for the taking of Metrobank’s officers’ depositions; that for their case, the issuance of a subpoena is not unreasonable and oppressive, but instead favorable to Metrobank, since it will present the testimony of these officers just the same during the presentation of its own evidence; that the documents sought to be produced are relevant and will prove whether petitioners have paid their obligations to Metrobank in full, and will settle the issue relative to the validity or invalidity of the foreclosure proceedings; and that the Rules do not prohibit a party from presenting the adverse party as its own witness.

Issue:

            THE COURT OF APPEALS COMMITTED REVERSIBLE ERRORS IN REQUIRING NOTICE AND HEARING (SECS. 4 AND 5, RULE 15, RULES OF COURT) FOR A MERE MOTION FOR SUBPOENA OF RESPONDENT BANK’S OFFICERS WHEN SUCH REQUIREMENTS APPLY ONLY TO DEPOSITION UNDER SEC. 6, RULE 25, RULES OF COURT.

Held:

On the procedural issue, it is quite clear that Metrobank was notified of the Motion for Issuance of Subpoena Duces Tecum Ad Testificandum; in fact, it filed a timely Opposition thereto. The technical defect of lack of notice of hearing was thus cured by the filing of the Opposition.

As officers of the adverse party Metrobank are being compelled to testify as the calling party’s main witnesses; likewise, they are tasked to bring with them documents which shall comprise the petitioners’ principal evidence. This is not without significant consequences that affect the interests of the adverse party, as will be shown below.

As a rule, in civil cases, the procedure of calling the adverse party to the witness stand is not allowed, unless written interrogatories are first served upon the latter. This is embodied in Section 6, Rule 25 of the Rules, which provides –

Sec. 6. Effect of failure to serve written interrogatories.

Unless thereafter allowed by the court for good cause shown and to prevent a failure of justice, a party not served with written interrogatories may not be compelled by the adverse party to give testimony in open court, or to give a deposition pending appeal.

One of the purposes of the above rule is to prevent fishing expeditions and needless delays; it is there to maintain order and facilitate the conduct of trial. It will be presumed that a party who does not serve written interrogatories on the adverse party beforehand will most likely be unable to elicit facts useful to its case if it later opts to call the adverse party to the witness stand as its witness. Instead, the process could be treated as a fishing expedition or an attempt at delaying the proceedings; it produces no significant result that prior written interrogatories might bring.

Besides, since the calling party is deemed bound by the adverse party’s testimony, compelling the adverse party to take the witness stand may result in the calling party damaging its own case. Otherwise stated, if a party cannot elicit facts or information useful to its case through the facility of written interrogatories or other mode of discovery, then the calling of the adverse party to the witness stand could only serve to weaken its own case as a result of the calling party’s being bound by the adverse party’s testimony, which may only be worthless and instead detrimental to the calling party’s cause.

Another reason for the rule is that by requiring prior written interrogatories, the court may limit the inquiry to what is relevant, and thus prevent the calling party from straying or harassing the adverse party when it takes the latter to the stand.

Thus, the rule not only protects the adverse party from unwarranted surprises or harassment; it likewise prevents the calling party from conducting a fishing expedition or bungling its own case. Using its own judgment and discretion, the court can hold its own in resolving a dispute, and need not bear witness to the parties perpetrating unfair court practices such as fishing for evidence, badgering, or altogether ruining their own cases. Ultimately, such unnecessary processes can only constitute a waste of the court’s precious time, if not pointless entertainment.

In the present case, petitioners seek to call Metrobank’s officers to the witness stand as their initial and main witnesses, and to present documents in Metrobank’s possession as part of their principal documentary evidence. This is improper. Petitioners may not be allowed, at the incipient phase of the presentation of their evidence-in-chief at that, to present Metrobank’s officers – who are considered adverse parties as well, based on the principle that corporations act only through their officers and duly authorized agents – as their main witnesses; nor may they be allowed to gain access to Metrobank’s documentary evidence for the purpose of making it their own. This is tantamount to building their whole case from the evidence of their opponent. The burden of proof and evidence falls on petitioners, not on Metrobank; if petitioners cannot prove their claim using their own evidence, then the adverse party Metrobank may not be pressured to hang itself from its own defense.

It is true that under the Rules, a party may, for good cause shown and to prevent a failure of justice, be compelled to give testimony in court by the adverse party who has not served written interrogatories. But what petitioners seek goes against the very principles of justice and fair play; they would want that Metrobank provide the very evidence with which to prosecute and build their case from the start. This they may not be allowed to do.

Finally, the Court may not turn a blind eye to the possible consequences of such a move by petitioners. As one of their causes of action in their Complaint, petitioners’ claim that they were not furnished with specific documents relative to their loan agreement with Metrobank at the time they obtained the loan and while it was outstanding. If Metrobank were to willingly provide petitioners with these documents even before petitioners can present evidence to show that indeed they were never furnished the same, any inferences generated from this would certainly not be useful for Metrobank. One may be that by providing petitioners with these documents, Metrobank would be admitting that indeed, it did not furnish petitioners with these documents prior to the signing of the loan agreement, and while the loan was outstanding, in violation of the law.