23. Deposition – Pajarillaga vs. CA, G.R. No.

163515, October 31, 2008

Facts:

On November 24, 1995, private respondent Thomas T. Kalangeg filed

with the RTC of Bontoc, Mt. Province, Branch 36, a complaint for a sum of
money with damages against petitioner Isidro T. Pajarillaga.

Since the parties failed to reach an amicable settlement, trial on the

merits ensued. On March 10, 1997, private respondent presented his first
witness. At the next scheduled hearing on August 8, 1997, neither petitioner
nor his counsel appeared despite notice. Upon private respondent’s motion, the
trial court allowed him to present his remaining two witnesses subject to
petitioners cross-examination on the next scheduled hearing on September 2,
1997. But when the case was called on that date, petitioner and his counsel
were again absent. Upon private respondent’s motion, the trial court declared
petitioner to have waived his right of cross-examination and allowed private
respondent to make a formal offer of evidence.

In an Order dated October 8, 1997, the trial court admitted all the
exhibits formally offered by private respondent. It also scheduled petitioners
presentation of evidence on October 28, 29 and 30, 1997.

Petitioner moved to reset the hearing to November 17, 1997. The trial
court granted his motion and reset the hearing to December 15, 1997.

On December 10, 1997, however, petitioner filed a Motion for Leave of

Court to Take the Deposition of the Defendant Upon Written Interrogatories on
the grounds that: (1) petitioner resides in Manila which is more than four
hundred (400) kilometers from Bontoc, Mt. Province; and (2) petitioner is
suffering from an illness which prohibits him from doing strenuous activities.

Private respondent opposed the motion. On December 15, 1997, neither

petitioner nor his counsel again appeared. Nonetheless, the trial court reset the
case to January 12, 1998 for the presentation of petitioner’s evidence. What
transpired on said date, however, is not disclosed by the records before this
Court.

In an Order dated January 29, 1998, the trial court denied petitioners

motion

Considering that the above-entitled case has been pending

since November 24, 1995, and hearings thereof have been delayed
almost always at the instance of the defendant, the latter’s motion
 for leave of Court to take said defendants deposition upon written
interrogatories at this late stage of the proceedings is hereby
denied.

Wherefore, in the interest of justice defendant is granted one

more chance to adduce his evidence on February 18, 1998, at 8:30
o’clock in the morning. Otherwise, he shall be deemed to have
waived his right thereto.

SO ORDERED.

Petitioner moved for reconsideration which the trial court denied. It also
reset the hearing to April 20, 1998.

Petitioner elevated the case to the Court of Appeals via a petition for

certiorari under Rule 65 of the 1997 Rules of Court. In affirming the trial
courts orders, the appellate court ruled that: First, the denial of petitioners
motion was not tainted with grave abuse of discretion since the trial court gave
petitioner full opportunity to present his evidence. Second, petitioners motion
came much too late in the proceedings since private respondent has already
rested his case. Third, the medical certificate which petitioner submitted to
validate his allegation of illness merely contained a remark that the patient is
advised to avoid strenuous activity. It did not state that the travel from Manila
to Mt. Province for the scheduled hearings was too strenuous to endanger
petitioner’s health. Fourth, the threats to petitioner’s life by private respondents
relatives were belatedly alleged only in his motion for reconsideration.

Hence this appeal.

Issue:

Whether the taking of petitioner’s deposition by written interrogatories is

proper under the circumstances obtaining in this case.

Ruling:

After considering the contentions and submissions of the parties, we are

in agreement that the petition lacks merit.

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

is to supplement the pleadings for the purpose of disclosing the real points of
dispute between the parties and affording an adequate factual basis during the
preparation for trial.  It should be allowed absent any showing that taking it
would prejudice any party. 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. 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; 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.

There is nothing in the Rules of Court or in jurisprudence which restricts

a deposition to the sole function of being a mode of discovery before trial.
Under certain conditions and for certain limited purposes, it may be taken even
after trial has commenced and may be used without the deponent being
actually called to the witness stand. There is no rule that limits deposition-
taking only to the period of pre-trial or before it; no prohibition exists against
the taking of depositions after pre-trial. There can be no valid objection to
allowing them during the process of executing final and executory judgments,
when the material issues of fact have become numerous or complicated.

Such being the case, there is really nothing objectionable, per se, with

petitioner availing of this discovery measure after private respondent has
rested his case and prior to petitioners presentation of evidence. To reiterate,
depositions may be taken at any time after the institution of any action,
whenever necessary or convenient.

But when viewed vis the several postponements made by petitioner for

the initial presentation of his evidence, we are of the view that his timing is, in
fact, suspect. The records before us show that petitioner stopped attending the
hearings after private respondent presented his first witness. Petitioner offered
no excuse for his and his counsel’s absences. Moreover, the trial court has set
four (4) hearing dates for the initial presentation of his evidence. But he merely
moved for its resetting without invoking the grounds which he now presents
before us.

Besides, even as we scrutinize petitioner’s arguments, we think that he

has not sufficiently shown an exceptional or unusual case for us to grant leave
and reverse the trial and appellate courts.

Under Section 4, Rule 23 of the Rules of Court, depositions may be used

for the trial or for the hearing of a motion or an interlocutory proceeding, under
the following circumstances:
 SEC. 4. Use of depositions.

x x x x

(c) The deposition of a witness, whether or not a party, may

be used by any party for any purpose if the court finds: (1) that the
witness is dead; or (2) that the witness resides at a distance more
than one hundred (100) kilometers from the place of trial or
hearing, or is out of the Philippines, unless it appears that his
absence was procured by the party offering the deposition; or (3)
that the witness is unable to attend or testify because of age,
sickness, infirmity, or imprisonment; or (4) that the party offering
the deposition has been unable to procure the attendance of the
witness by subpoena; or (5) upon application and notice, that such
exceptional circumstances exist as to make it desirable, in the
interest of justice and with due regard to the importance of
presenting the testimony of witnesses orally in open court, to allow
the deposition to be used; and

x x x x

In this case, petitioner invokes distance and illness to avail of the

discovery measure. We agree with private respondent that the matter of
distance could have been settled had petitioner requested for a change of
venue earlier in the proceedings. Petitioner has attended the pre-trial and
the hearing where private respondent presented his first witness. He need not
await his turn to present evidence before realizing the great inconvenience
caused by the enormous distance between his place of residence and the place
of hearing.

Nor are we inclined to accept petitioners claim of illness. As aptly

observed by the Court of Appeals, the medical certificate submitted by
petitioner merely contained a remark that the patient is advised to avoid
strenuous activity. It was not alleged that the travel from Manila to Mt.
Province for the scheduled hearings was too strenuous to endanger petitioner’s
health.

We also agree with the Court of Appeals that the threats to petitioners
life by private respondents relatives appear to be a mere afterthought since it
was raised only in petitioners motion for reconsideration of the trial courts
denial of his motion for leave. We also note that the incident which gave rise to
the alleged threats took place prior to the pre-trial. Surely, petitioner could
have informed the trial court of this incident had there been truth to, and
serious implication of, his allegation.
 Finally, we must emphasize that while the rules on discovery are liberally
constructed so as to ascertain truth and to expedite the disposal of cases, the
trial court may disallow a deposition if there are valid reasons for so
ruling. Here, we find the protracted delay in the litigation at petitioners
instance coupled with the belated and unsubstantiated allegations of
illness and threats to petitioners life, more than sufficient reasons for the
trial court to deny petitioners motion.

WHEREFORE, the instant petition is DENIED for lack of merit. The

Decision and Resolution of the Court of Appeals are AFFIRMED. 

24. Trial, failure to state a cause of action may be cured by evidence

during trial and amendment thereto to conform to evidence presented –
Swagman Hotel vs. CA, G.R. NO. 161135, April 08, 2005

Facts:

May a complaint that lacks a cause of action at the time it was filed be
cured by the accrual of a cause of action during the pendency of the case?
This is the basic issue raised in this petition for the Courts consideration.
Sometime in 1996 and 1997, petitioner Swagman Hotels and Travel, Inc.,
through Atty. Leonor L. Infante and Rodney David Hegerty, its president and
vice-president, respectively, obtained from private respondent Neal B. Christian
loans evidenced by three promissory notes dated 7 August 1996, 14 March
1997, and 14 July 1997. Each of the promissory notes is in the amount of
US$50,000 payable after three years from its date with an interest of 15% per
annum payable every three months. In a letter dated 16 December 1998,
Christian informed the petitioner corporation that he was terminating the loans
and demanded from the latter payment in the total amount of US$150,000
plus unpaid interests in the total amount of US$13,500.
On 2 February 1999, private respondent Christian filed with the Regional
Trial Court of Baguio City, Branch 59, a complaint for a sum of money and
damages against the petitioner corporation, Hegerty, and Atty. Infante. The
complaint alleged as follows: On 7 August 1996, 14 March 1997, and 14 July
1997, the petitioner, as well as its president and vice-president obtained loans
from him in the total amount of US$150,000 payable after three years, with an
interest of 15% per annum payable quarterly or every three months. For a
while, they paid an interest of 15% per annum every three months in
accordance with the three promissory notes. However, starting January 1998
until December 1998, they paid him only an interest of 6% per annum, instead
of 15% per annum, in violation of the terms of the three promissory notes.
Thus, Christian prayed that the trial court order them to pay him jointly and
solidarily the amount of US$150,000 representing the total amount of the
loans; US$13,500 representing unpaid interests from January 1998 until
December 1998;P100,000 for moral damages; P50,000 for attorneys fees; and
the cost of the suit.
The petitioner corporation, together with its president and vice-president,
filed an Answer raising as defenses lack of cause of action and novation of the
principal obligations. According to them, Christian had no cause of action
because the three promissory notes were not yet due and demandable. In
December 1997, since the petitioner corporation was experiencing huge losses
due to the Asian financial crisis, Christian agreed (a) to waive the interest of
15% per annum, and (b) accept payments of the principal loans in installment
basis, the amount and period of which would depend on the state of business
of the petitioner corporation. Thus, the petitioner paid Christian capital
repayment in the amount of US$750 per month from January 1998 until the
time the complaint was filed in February 1999. The petitioner and its co-
defendants then prayed that the complaint be dismissed and that Christian be
ordered to pay P1 million as moral damages; P500,000 as exemplary damages;
and P100,000 as attorneys fees.
In due course and after hearing, the trial court rendered a decision on 5
May 2000 declaring the first two promissory notes dated 7 August 1996 and 14
March 1997 as already due and demandable and that the interest on the loans
had been reduced by the parties from 15% to 6% per annum. It then ordered
the petitioner corporation to pay Christian the amount of $100,000
representing the principal obligation covered by the promissory notes dated 7
August 1996 and 14 March 1997, plus interest of 6% per month thereon until
fully paid, with all interest payments already paid by the defendant to the
plaintiff to be deducted therefrom.
The trial court ratiocinated in this wise:

(1) There was no novation of defendants obligation to the plaintiff.

(2) When the instant case was filed on February 2, 1999, none of the
promissory notes was due and demandable. As of this date however, the first
and the second promissory notes have already matured. Hence, payment is
already due.

Under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a complaint

which states no cause of action may be cured by evidence presented without
objection. Thus, even if the plaintiff had no cause of action at the time he filed
the instant complaint, as defendants obligation are not yet due and
demandable then, he may nevertheless recover on the first two promissory
notes in view of the introduction of evidence showing that the obligations
covered by the two promissory notes are now due and demandable.
 In its decision of 5 September 2003, the Court of Appeals denied
petitioners appeal and affirmed in toto the decision of the trial court.
Its motion for reconsideration having been denied by the Court of Appeals
in its Resolution of 4 December 2003, the petitioner came to this Court raising
the following issues:

Issues:

Whether or not the Court of Appeals erred in affirming the decision of the
lower court which is invalid due to lack of cause of action.

Ruling:

Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil

Procedure, is the act or omission by which a party violates the right of another.
Its essential elements are as follows:
1. A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created;
2. An obligation on the part of the named defendant to respect or not to
violate such right; and
3. Act or omission on the part of such defendant in violation of the right
of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action
for recovery of damages or other appropriate relief.
It is, thus, only upon the occurrence of the last element that a cause
of action arises, giving the plaintiff the right to maintain an action in
court for recovery of damages or other appropriate relief.
It is undisputed that the three promissory notes were for the amount of
P50,000 each and uniformly provided for (1) a term of three years; (2) an
interest of 15 % per annum, payable quarterly; and (3) the repayment of the
principal loans after three years from their respective dates. However, both the
Court of Appeals and the trial court found that a renegotiation of the three
promissory notes indeed happened in December 1997 between the private
respondent and the petitioner resulting in the reduction not waiver of the
interest from 15% to 6% per annum, which from then on was payable monthly,
instead of quarterly. The term of the principal loans remained unchanged in
that they were still due three years from the respective dates of the promissory
notes. Thus, at the time the complaint was filed with the trial court on 2
February 1999, none of the three promissory notes was due yet; although, two
of the promissory notes with the due dates of 7 August 1999 and 14 March
2000 matured during the pendency of the case with the trial court. Both courts
also found that the petitioner had been religiously paying the private
respondent US$750 per month from January 1998 and even during the
pendency of the case before the trial court and that the private respondent had
accepted all these monthly payments.
With these findings of facts, it has become glaringly obvious that when the
complaint for a sum of money and damages was filed with the trial court on 2
February 1999, no cause of action has as yet existed because the
petitioner had not committed any act in violation of the terms of the
three promissory notes as modified by the renegotiation in December
1997. Without a cause of action, the private respondent had no right to
maintain an action in court, and the trial court should have therefore
dismissed his complaint.
Despite its finding that the petitioner corporation did not violate the
modified terms of the three promissory notes and that the payment of the
principal loans were not yet due when the complaint was filed, the trial court
did not dismiss the complaint, citing Section 5, Rule 10 of the 1997 Rules of
Civil Procedure, which reads:

Section 5. Amendment to conform to or authorize presentation of evidence. When

issues not raised by the pleadings are tried with the express or implied consent
of the parties, they shall be treated in all respects as if they had been raised in
the pleadings. Such amendment of the pleadings as may be necessary to cause
them to conform to the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but failure to amend
does not affect the result of the trial of these issues. If evidence is objected to at
the trial on the ground that it is not within the issues made by the pleadings,
the court may allow the pleadings to be amended and shall do so with liberality
if the presentation of the merits of the action and the ends of substantial
justice will be subserved thereby. The court may grant a continuance to enable
the amendment to be made.

According to the trial court, and sustained by the Court of Appeals, this
Section allows a complaint that does not state a cause of action to be cured by
evidence presented without objection during the trial. Thus, it ruled that even if
the private respondent had no cause of action when he filed the complaint for a
sum of money and damages because none of the three promissory notes was
due yet, he could nevertheless recover on the first two promissory notes dated
7 August 1996 and 14 March 1997, which became due during the pendency of
the case in view of the introduction of evidence of their maturity during the
trial.
Such interpretation of Section 5, Rule 10 of the 1997 Rules of Civil
Procedure is erroneous.
 Amendments of pleadings are allowed under Rule 10 of the 1997 Rules of
Civil Procedure in order that the actual merits of a case may be determined in
the most expeditious and inexpensive manner without regard to technicalities,
and that all other matters included in the case may be determined in a single
proceeding, thereby avoiding multiplicity of suits. Section 5 thereof applies to
situations wherein evidence not within the issues raised in the pleadings is
presented by the parties during the trial, and to conform to such evidence the
pleadings are subsequently amended on motion of a party. Thus, a complaint
which fails to state a cause of action may be cured by evidence presented
during the trial.
However, the curing effect under Section 5 is applicable only if a cause
of action in fact exists at the time the complaint is filed, but the
complaint is defective for failure to allege the essential facts. For
example, if a complaint failed to allege the fulfillment of a condition precedent
upon which the cause of action depends, evidence showing that such condition
had already been fulfilled when the complaint was filed may be presented
during the trial, and the complaint may accordingly be amended
thereafter. Thus, in Roces v. Jalandoni, this Court upheld the trial court in
taking cognizance of an otherwise defective complaint which was later cured by
the testimony of the plaintiff during the trial. In that case, there was in fact a
cause of action and the only problem was the insufficiency of the allegations in
the complaint. This ruling was reiterated in Pascua v. Court of Appeals.
It thus follows that a complaint whose cause of action has not yet accrued
cannot be cured or remedied by an amended or supplemental pleading alleging
the existence or accrual of a cause of action while the case is pending. Such an
action is prematurely brought and is, therefore, a groundless suit, which
should be dismissed by the court upon proper motion seasonably filed by the
defendant. The underlying reason for this rule is that a person should not be
summoned before the public tribunals to answer for complaints which are
immature. As this Court eloquently said in Surigao Mine Exploration Co., Inc. v.
Harris:

It is a rule of law to which there is, perhaps, no exception, either at law or in

equity, that to recover at all there must be some cause of action at the
commencement of the suit. As observed by counsel for appellees, there are
reasons of public policy why there should be no needless haste in bringing up
litigation, and why people who are in no default and against whom there is yet
no cause of action should not be summoned before the public tribunals to
answer complaints which are groundless. We say groundless because if the
action is immature, it should not be entertained, and an action prematurely
brought is a groundless suit.

It is true that an amended complaint and the answer thereto take the place of
the originals which are thereby regarded as abandoned (Reynes vs. Compaa
General de Tabacos [1912], 21 Phil. 416; Ruyman and Farris vs. Director of
Lands [1916], 34 Phil., 428) and that the complaint and answer having been
superseded by the amended complaint and answer thereto, and the answer to
the original complaint not having been presented in evidence as an exhibit, the
trial court was not authorized to take it into account. (Bastida vs. Menzi & Co.
[1933], 58 Phil., 188.) But in none of these cases or in any other case have we
held that if a right of action did not exist when the original complaint was filed,
one could be created by filing an amended complaint. In some jurisdictions in
the United States what was termed an imperfect cause of action could be
perfected by suitable amendment (Brown vs. Galena Mining & Smelting Co., 32
Kan., 528; Hooper vs. City of Atlanta, 26 Ga. App., 221) and this is virtually
permitted in Banzon and Rosauro vs. Sellner ([1933], 58 Phil., 453); Asiatic
Potroleum [sic] Co. vs. Veloso ([1935], 62 Phil., 683); and recently in Ramos vs.
Gibbon (38 Off. Gaz., 241). That, however, which is no cause of action
whatsoever cannot by amendment or supplemental pleading be converted
into a cause of action: Nihil de re accrescit ei qui nihil in re quando jus
accresceret habet.

We are therefore of the opinion, and so hold, that unless the plaintiff has a
valid and subsisting cause of action at the time his action is commenced,
the defect cannot be cured or remedied by the acquisition or accrual of
one while the action is pending, and a supplemental complaint or an
amendment setting up such after-accrued cause of action is not
permissible.

Hence, contrary to the holding of the trial court and the Court of Appeals,
the defect of lack of cause of action at the commencement of this suit cannot
be cured by the accrual of a cause of action during the pendency of this case
arising from the alleged maturity of two of the promissory notes on 7 August
1999 and 14 March 2000.
In sum, based on our disquisition on the lack of cause of action when the
complaint for sum of money and damages was filed by the private respondent,
the petition in the case at bar is impressed with merit.
WHEREFORE, the petition is hereby GRANTED. The Decision of the Court
of Appeals which affirmed the Decision of the Regional Trial Court of Baguio,
Branch 59, granting in part private respondents complaint for sum of money
and damages, and its Resolution of 4 December 2003, which denied petitioners
motion for reconsideration are hereby REVERSED and SET ASIDE. The
complaint docketed as Civil Case No. 4282-R is hereby DISMISSED for lack of