Ng Meng Tam vs Chinabank

G.R. No. 214054, Aug. 5, 2015;

NG MENG TAM, Petitioner, vs. CHINA BANKING CORPORATION,Respondent.

This case stemmed from a collection suit filed by China Banking Corporation (China Bank) against Ever Electrical Manufacturing Company Inc. (Ever), the heirs of Go Tong, Vicente Go, George Go and petitioner Ng Meng Tam.

China Bank alleged that it granted Ever a loan. The loan was allegedly backed by two surety agreements executed by Vicente, George and petitioner in its favor. When Ever defaulted in its payment, China Bank sent demand letters collectively addressed to George, Vicente and petitioner. The demands were unanswered. China Bank filed the complaint for collection.

In his Answer, petitioner alleged that the surety agreements were null and void since these were executed before the loan was granted. Petitioner posited that the surety agreements were contracts of adhesion to be construed against the entity which drafted the same. Petitioner also alleged that he did not receive any demand letter.

Petitioner served interrogatories to parties pursuant to Sections 111 and 6,12 Rule 25 of the Rules of Court to China Bank and required Mr. George C. Yap, Account Officer of the Account Management Group, to answer.

George Yap executed his answers to interrogatories to parties.

Petitioner moved for the hearing of his affirmative defenses. Because he found Yap’s answers to the interrogatories to parties evasive and not responsive, petitioner applied for the issuance of a subpoena duces tecum and ad testificandum against George Yap pursuant to Section 6,14 Rule 25 of the Revised Rules of Court.

When the case was called for the presentation of George Yap as a witness, China Bank objected citing Section 5 of the JAR. China Bank said that Yap cannot be compelled to testify in court because petitioner did not obtain and present George Yap’s judicial affidavit. The RTC required the parties to submit their motions on the issue of whether the preparation of a judicial affidavit by George Yap as an adverse or hostile witness is an exception to the judicial affidavit rule.

Petitioner contended that Section 5 does not apply to Yap because it specifically excludes adverse party witnesses and hostile witnesses from its application. Petitioner insists that Yap needed to be called to the stand so that he may be qualified as a hostile witness pursuant to the Rules of Court. China Bank, on the other hand, stated that petitioner’s characterization of Yap’s answers to the interrogatories to parties as ambiguous and evasive is a declaration of what type of witness Yap is. It theorizes that the interrogatories to parties answered by Yap serve as the judicial affidavit and there is no need for Yap to be qualified as a hostile witness.

The RTC ruled that Section 5 did not apply to Yap since he was an adverse witness and he did not unjustifiably decline to execute a judicial affidavit.

The RTC stressed that Section 5 of the JAR required the requested witness’ refusal to be unjustifiable. It stated: the [JAR] requires that the refusal must be unjustifiable and without just cause. It must be pointed out that [China Bank]’s previous motions to quash the subpoena was grounded on the claim that having already submitted to this court his sworn written interrogatories, his being compelled to testify would be unreasonable, oppressive and pure harassment. Thus, witness’ refusal to testify cannot be considered unjustifiable since he raised valid grounds.

Issues:

1. Whether or not RTC committed an error of law when it interpreted sec. 5 of the JAR?

2. Whether or not RTC committed an error of law when it effectively disregarded the relevant rules on modes of discovery which govern the presentation of adverse witnesses.

Held:

1. Under Section 10,25 parties are to be penalized if they do not conform to the provisions of the JAR. Parties are however allowed to resort to the application of a subpoena pursuant to Rule 21 of the Rules of Court in Section 5 of the JAR in certain situations. Section 5 provides:

Sec. 5. Subpoena. – If the government employee or official, or there quested witness, who is neither the witness of the adverse party nor a hostile witness, unjustifiably declines to execute a judicial affidavit or refuses without just cause to make the relevant books, documents, or other things under his control available for copying, authentication, and eventual production in court, the requesting party may avail himself of the issuance of a subpoena ad testificandum or duces tecum under Rule 21 of the Rules of Court. The rules governing the issuance of a subpoena to the witness in this case shall be the same as when taking his deposition except that the taking of a judicial affidavit shal1 be understood to be ex parte.

While we agree with the RTC that Section 5 has no application to Yap as he was presented as a hostile witness we cannot agree that there is need for a finding that witness unjustifiably refused to execute a judicial affidavit. Section 5 of the JAR contemplates a situation where there is a (a) government employee or official or (b) requested witness who is not the (1) adverse party’s witness nor (2) a hostile witness. If this person either (a) unjustifiably declines to execute a judicial affidavit or (b) refuses without just cause to make the relevant documents available to the other party and its presentation to court, Section 5 allows the requesting party to avail of issuance of subpoena ad testificandum or duces tecum under Rule 21 of the Rules of Court. Thus, adverse party witnesses and hostile witnesses being excluded they are not covered by Section 5. Expressio unius est exclusionalterius: the express mention of one person, thing, or consequence implies the exclusion of all others.

Here, Yap is a requested witness who is the adverse party’s witness. Regardless of whether he unjustifiably declines to execute a judicial affidavit or refuses without just cause to present the documents, Section 5 cannot be made to apply to him for the reason that he is included in a group of individuals expressly exempt from the provision’s application.

2. The JAR being silent on this point, we turn to the provisions governing the rules on evidence covering hostile witnesses specially Section 12, Rule 132 of the Rules of Court which provides:

SEC. 12. Party may not impeach his own witness. – Except with respect to witnesses referred to in paragraphs (d) and (e) of Section 10, the party producing a witness is not allowed to impeach his credibility.

A witness may be considered as unwilling or hostile only if so declared by the court upon adequate showing of his adverse interest, unjustified reluctance to testify, or his having misled the party into calling him to the witness stand.

The unwilling or hostile witness so declared, or the witness who is an adverse party, may be impeached by the party presenting him in all respects as if he had been called by the adverse party, except by evidence of his bad character. He may also be impeached and cross-examined by the adverse party, but such cross-examination must only be on the subject matter of his examination-in-chief.

Before a party may be qualified under Section 12, Rule 132 of the Rules of Court, the party presenting the adverse party witness must comply with Section 6, Rule 25 of the Rules of Court 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.

In Afulugencia v. Metropolitan Bank & Trust Co.,27 this Court stated that “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.”

In this case, parties, with the approval of the Court, furnished and answered interrogatories to parties pursuant to Rule 25 of the Rules of Court. They therefore complied with Section 6 of Rule 25 of the Rules of Court. Before the present controversy arose, the RTC had already issued subpoenas for Yap to testify and produce documents. He was called to the witness stand when China Bank interposed its objection for non-compliance with Section 5 of the JAR. Having established that Yap, as an adverse party witness, is not within Section 5 of the JAR’s scope, the rules in presentation of adverse party witnesses as provided for under the Rules of Court shall apply. In keeping with this Court's decision in Afulugencia, there is no reason for the RTC not to proceed with the presentation of Yap as a witness.

In sum, Section 5 of the JAR expressly excludes from its application adverse party and hostile witnesses. For the presentation of these types of witnesses, the provisions on the Rules of Court under the Revised Rules of Evidence and all other correlative rules including the modes of deposition and discovery rules shall apply.