G.R. No. 234203 - Heirs of Ferrer vs. Ferrer

Case Summary (G.R. No. 234203)

Factual Background

American President Lines, Ltd. sued Dasmarinas Garments, Inc. in the Regional Trial Court to recover US $53,228.45 and an amount equivalent to twenty-five percent as attorney’s fees and litigation expenses. Dasmarinas denied liability and asserted compulsory counterclaims. At trial, APL presented one witness whose testimony concluded on November 12, 1988. The trial was reset for May 3, 1989 for the reception of two more APL witnesses. Instead of presenting those witnesses in court, APL moved to take their depositions in Taipei, Taiwan, and sought that a commission or letters rogatory be issued to the Philippine consul, vice-consul, or consular agent in Taipei.

The Motion and the Amended Request

When it became apparent that the Philippines had no official consulate in Taiwan because of the Government’s one-China policy, APL amended its motion to request that the commission or letters rogatory be addressed to Director Joaquin R. Roces of the Asian Exchange Center, Inc., to take the depositions of the two Taiwanese witnesses. Dasmarinas opposed the motion on multiple grounds, asserting defects in the form of the request, the unnecessary nature of letters rogatory, and the Rules’ preference for oral testimony in open court rather than depositions.

Trial Court Proceedings and Orders

In the course of the incident, APL submitted a letter from Director Joaquin R. Roces indicating that the Asian Exchange Center, Inc. could take depositions only upon prior authority from the Department of Foreign Affairs, and advised compliance with the Supreme Court Administrative Circular requiring requests to be coursed through the Department of Foreign Affairs. By Order dated March 15, 1991, the Regional Trial Court granted APL’s motion. The Court commissioned the Asian Exchange Center, Inc., through Director Roces, to take the depositions of the named Taiwanese witnesses upon written interrogatories and enjoined compliance with Sections 25-29 of Rule 24, Rules of Court, and directed that the order be coursed through the Department of Foreign Affairs pursuant to Administrative Circular No. 4.

Motion for Reconsideration and Trial Court’s Secondary Ruling

Dasmarinas filed a motion for reconsideration on June 25, 1991 contending that the Asian Exchange Center, Inc. lacked authority under the Rules to take depositions, that authorization had not been established, that permitting a private entity to take depositions abroad would infringe judicial sovereignty, and that depositions by written interrogatories were inadequate where credibility and demeanor were central. By Order dated July 5, 1991 the Trial Court denied reconsideration as filed out of time and characterized the motion as a rehash of previously considered arguments. The Court further directed APL to implement the deposition-taking or be deemed to have waived the introduction of additional deposition evidence.

Petition to the Court of Appeals

Dasmarinas filed a petition for certiorari in the Court of Appeals seeking nullification of the Trial Court orders. The Court of Appeals issued a temporary restraining order to maintain the status quo and prevent irreparable injury. After full proceedings, the Court of Appeals, Third Division, denied the petition for certiorari on September 23, 1992, and denied reconsideration on December 11, 1992.

Issues on Review in the Supreme Court

In the petition for review on certiorari, Dasmarinas argued that the Court of Appeals erred by upholding the Trial Court’s authorization for deposition-taking in a foreign jurisdiction before a private entity not authorized by law, and that such deposition-taking during trial prejudiced Dasmarinas because: (1) depositions are a mode of pretrial discovery and improper after the case has reached trial; (2) the procedure deprived the trial judge of the opportunity to observe witness demeanor and thus was inherently unfair; and (3) the depositions were to be taken in Taipei, a jurisdiction not recognized by the Philippines, before the Asian Exchange Center, Inc., which is not authorized by law to take depositions.

Legal Principles on Depositions and Their Use

The Court reviewed the nature and purpose of depositions as a discovery device intended to compel disclosure of facts relevant to litigation. The Court emphasized that depositions are principally for informing parties of material facts and are not generally substitutes for oral testimony in open court. The Court reiterated Section 1, Rule 132, Rules of Court establishing that testimony at trial shall be given orally in open court unless exceptions apply. The Court set out the limited situations in which deposition testimony may be used under Section 4, Rule 24, Rules of Court, including where the witness is dead, out of the Philippines, unable to attend because of age, sickness, infirmity, imprisonment, or where exceptional circumstances make it desirable in the interest of justice. The Court cited Section 47, Rule 132, recognizing the admissibility of prior testimony given where the deponent is deceased or otherwise unable to testify.

Mode and Authority for Taking Depositions Abroad

The Court explained that depositions may be taken in the Philippines before judges, municipal officers, or notaries public pursuant to Section 10, Rule 24, and abroad either before Philippine diplomatic or consular officers pursuant to Section 11, Rule 24, or before persons appointed by commission or under letters rogatory. The Court examined Section 12, Rule 24, which provides that a commission or letters rogatory shall be issued only when necessary or convenient and may designate officers either by name or descriptive title. The Court distinguished commissions from letters rogatory, noting that letters rogatory customarily are sought after a commission has been returned unexecuted.

Court’s Assessment of the Asian Exchange Center, Inc. and the One-China Policy Argument

The Court found the argument that deposition-taking in Taipei was improper because the Philippines does not recognize the Republic of China to be inconsequential. The determinative factor was that the proposed deposition would be taken before a Philippine official acting under the authority of the Department of Foreign Affairs pursuant to a commission of the Philippine court. The Court observed that the Asian Exchange Center, Inc. could, upon request and authority of the Department of Foreign Affairs, issue a certificate authenticating certain foreign public acts, and that the Trial Court’s commission was to be coursed through the Department of Foreign Affairs in accordance with Administrative Circular No. 4. The Court concluded that such arrangements satisfied the Rules of Court so long as the opportunity for cross-examination remained available.

Court’s Rejection of the Prematurity and Fairness Arguments

The Court rejected the contention that depositions are confined to pretrial discovery and thus unavailable during trial. The Court stated that depositions are permissible at any time after the commencement of the action and noted express authorization for taking depositions to perpetuate testimony under Rule 134, Rules of Court, and recognized instances where depositions may be taken even during execution of final judgment. The Court held that a departure from oral testimony in open court did not render the procedure illegal so long as the statutory exceptions and procedures for deposition use under Section 4, Rule 24 were satisfied.

Discretion to Limit to Written Interrogatories and Cross-Examination

The Court found that the Trial Court acted within its discretion in conditioning the commission on taking the depositions by written interrogatories. The Court acknowledged that the Trial Court’s stated reason — that written interrogatories were necessary to afford Dasmarinas the opportunity to cross-examine — incorrectly implied that oral examination would preclude cross-examination. The Court

Case Syllabus (G.R. No. 234203)

Parties and Procedural Posture

American President Lines, Ltd. filed suit in the Regional Trial Court of Manila to recover US $53,228.45 plus an amount equivalent to twenty-five percent as attorney's fees and litigation expenses.
Dasmarinas Garments, Inc. answered on December 1, 1987, denied liability, and asserted compulsory counterclaims.
The case was scheduled for trial on April 27, 1988, and plaintiff's first witness completed testimony on November 12, 1988.
On May 3, 1989, American President Lines, Ltd. moved to take the depositions of Kenneth H. Lee and Yeong Fah Yeh in Taipei, Taiwan, and sought a commission or letters rogatory addressed to the Philippine consul, vice-consul, or consular agent in Taipei.
American President Lines, Ltd. filed an amended motion designating Director Joaquin Roces of the Asian Exchange Center, Inc. as the person to take the depositions because the Philippines had no official consular office in Taiwan.
Dasmarinas Garments, Inc. opposed the motion and instituted a special civil action for certiorari in the Court of Appeals after the Regional Trial Court granted the deposition-taking and denied a timely reconsideration.
The Court of Appeals denied relief on September 23, 1992 and denied reconsideration on December 11, 1992, prompting the present petition for review on certiorari to the Supreme Court.

Key Factual Allegations

American President Lines, Ltd. proffered that the Asian Exchange Center, Inc. would take the depositions only upon prior authority from the Department of Foreign Affairs, as shown by a letter from Director Joaquin R. Roces dated November 20, 1989.
American President Lines, Ltd. submitted information from a Taipei law firm on obtaining copies or abridged copies of documents under the ROC Civil Procedure Code.
Dasmarinas Garments, Inc. asserted that the motion for commission was fatally defective because it did not seek a foreign court's examination, that deposition-taking was unnecessary because the witnesses could be examined in the Philippine Court, and that the Rules of Court require oral testimony in open court.
The Regional Trial Court ordered the depositions to be taken by written interrogatories through the Asian Exchange Center, Inc., and directed that the commission be coursed through the Department of Foreign Affairs pursuant to Supreme Court Administrative Circular No. 4 dated April 6, 1987.

Issues Presented

Whether a party may, during trial, present evidence by taking depositions of witnesses in a foreign jurisdiction before a private entity not expressly authorized by law to take depositions in lieu of oral examination in open court.
Whether allowing a foreign plaintiff to present evidence by depositions taken abroad while the defendant must present witnesses in open court creates an inherently unfair procedure violative of procedural safeguards.
Whether the taking of depositions in Taipei before the Asian Exchange Center, Inc., a private entity in a jurisdiction not officially recognized by the Philippines, violated Philippine judicial sovereignty and the Rules of Court.

Trial Court Orders

The Regional Trial Court granted the motion on March 15, 1991, authorizing depositions of Kenneth H. Lee and Yeong Fah Yeh by deposition upon written interrogatories and commissioning the Asian Exchange Center, Inc. through Director Joaquin R. Roces to take the depositions.
The March 15, 1991 Order enjoined compliance with Sections 25–29 of Rule 24, Rules of Court, and directed that the Order be coursed through the Department of Foreign Affairs pursuant to Supreme Court Administrative Circular No. 4 d