G.R. No. 197122 - Santamaria vs. Cleary

Case Summary (G.R. No. 197122)

Key Dates and Procedural Posture

Cleary filed the Complaint on January 10, 2002. Pre-trial and discovery events occurred through 2007–2009. Cleary filed a Motion for Court Authorization to Take Deposition in Los Angeles on January 22, 2009. The RTC denied the motion by Order dated June 5, 2009 and denied reconsideration. The Court of Appeals granted Cleary’s petition for certiorari on August 10, 2010 and denied reconsideration. Petitioners brought consolidated Rule 45 petitions to the Supreme Court; the Decision under review issued June 15, 2016.

Governing Law and Contractual Venue Provision

Applicable procedural law: Rules of Court (1987 Rules) — specifically Rule 23 (Depositions), including Sections 1, 4, 16, 25, 29, and related provisions on admissibility and protective orders; Rule 132 on oral testimony in open court; Rule 21 on subpoenas. Contractual context: Paragraph 9.02 of the Stock Purchase and Put Agreement gave Cleary the sole discretion to bring suit in (a) California courts, (b) the U.S. District Court for the Central District of California, or (c) the courts of the corporation’s country of incorporation (the Philippines), and the parties waived preferential jurisdiction by reason of domicile.

Relief Requested by Cleary

Cleary, a U.S. resident who elected to file in Cebu, sought an order authorizing the taking of his deposition before the Philippine Consulate‑General in Los Angeles and for that deposition to be used as his direct testimony at trial. He invoked Rule 23, Section 4(c)(2) (use of deposition when the witness is more than 100 km from trial or is “out of the Philippines”) and proceeded to request court authorization in light of Department of Foreign Affairs/Department of Justice requirements for consular depositions.

Oppositions Raised by Petitioners

Santamaria and Boza argued that the right to take depositions is not absolute and is subject to Rule 23, Section 16 limits and judicial discretion; they contended Cleary, having chosen the Philippine forum, should submit to open‑court testimony so that demeanor can be observed and cross‑examination conducted directly, and that allowing deposition abroad would be costly, time‑consuming, and unfair. Go‑Perez similarly argued that an oral deposition by the plaintiff is not for discovery, would be oppressive and vexatious, and that Rule 132 requires open‑court testimony; she also challenged the appropriateness of using Rule 65 certiorari to review the RTC orders absent grave abuse of discretion.

RTC’s Reasons for Denial

The RTC denied the motion on two main grounds: (1) because Cleary elected to pursue judicial relief in the Philippines he should submit to Philippine court procedures, and (2) the proposed deponent is the plaintiff himself and is not physically impaired, so it would be best for him to appear and testify in open court. The RTC characterized depositions as not intended to substitute for viva voce testimony under Rule 132, Section 1.

Court of Appeals Ruling

The Court of Appeals reversed the RTC, holding that Rule 23, Section 1 allows taking depositions of any person and that the fact Cleary was the plaintiff did not preclude him from availing deposition procedures. The CA found that Rules permit deposition‑taking with broad latitude and that Rule 23, Section 4 permits use of deposition where the witness is “out of the Philippines.”

Legal Distinction Between Taking and Use of Depositions

The Supreme Court’s analysis emphasizes a well‑established distinction: the Rules afford “utmost freedom” to take depositions (discovery function) while imposing circumscribed conditions on the use of depositions at trial. Rule 23, Section 1 permits taking testimony by oral deposition or written interrogatories; Rule 23, Section 4 enumerates limited circumstances under which a deposition may be used in lieu of oral testimony—death, distance (over 100 km or “out of the Philippines”), infirmity, inability to procure attendance, or other exceptional circumstances.

Protective Orders and “Good Cause” Under Rule 23, Section 16

Rule 23, Section 16 empowers the trial court to issue protective orders, including refusing or limiting deposition‑taking, but such orders require (1) proper notice and (2) a showing of “good cause” (a substantial, legally cognizable reason). Jurisprudence makes clear that denial of deposition altogether is rare and requires a strong showing; mere allegations of bad faith, inconvenience, cost, or that the deposition is not for discovery are insufficient without specific factual proof demonstrating oppression, embarrassment, or annoyance warranting the extreme remedy.

Application of the Rules to the Present Facts

Applying the foregoing, the Supreme Court found the RTC’s two stated grounds insufficient to justify denying deposition entirely. Cleary validly invoked Rule 23 procedures and alleged he was “out of the Philippines,” a ground specifically enumerated in Section 4(c)(2) for use of deposition. The RTC’s insistence that Cleary must appear because he elected the Philippine forum is misplaced: election of forum does not preclude resort to discovery devices under the Rules, and the contractual option to file in the Philippines does not strip a nonresident of the procedural relief available to witnesses abroad. The RTC’s reliance on the fact that Cleary had no physical impairment was immaterial to the statutory ground Cleary relied upon.

Precedents Considered and Distinctions Drawn

The Court reviewed prior decisions (Dasmariñas Garments v. Reyes; San Luis v. Rojas; Jonathan Landoil International v. Mangundadatu; Fortune Corp.; Northwest Airlines v. Cruz; Republic v. Sandiganbayan) and distinguished them where appropriate. Notably, Northwest involved a de

Case Syllabus (G.R. No. 197122)

Procedural History

Petitioners filed consolidated petitions under Rule 45 of the Rules of Court challenging the Court of Appeals’ August 10, 2010 Decision (G.R. No. 197122) granting Thomas Cleary’s petition for certiorari and reversing the Regional Trial Court’s Orders that denied Cleary’s Motion for Court Authorization to Take Deposition; the Court of Appeals’ May 11, 2011 Resolution denying reconsideration was likewise assailed.
On January 10, 2002, respondent Thomas Cleary, an American citizen with office address in California, filed a Complaint (Civil Case No. CEB-27296) for specific performance and damages before the Regional Trial Court of Cebu involving shares of Miranila Land Development Corporation for which he paid US$191,250.00.
Answers with compulsory counterclaims were filed by: Ingrid Sala Santamaria (July 21, 2006), Astrid Sala Boza (March 27, 2007), and Kathryn Go-Perez (June 6, 2002).
Notice of pre-trial was issued dated July 4, 2007; Cleary’s pre-trial brief stipulated he would testify “in support of the allegations of his complaint, either on the witness stand or by oral deposition” and availed himself “of the modes of discovery under the rules.”
On January 22, 2009, Cleary moved for court authorization to take his deposition before the Consulate-General of the Philippines in Los Angeles and use it as his direct testimony.
The trial court, in an Order dated June 5, 2009 (penalized by Presiding Judge Estela Alma A. Singco, Branch 12, RTC Cebu), denied Cleary’s Motion and denial of reconsideration followed.
Cleary elevated the matter to the Court of Appeals which, on August 10, 2010, granted his petition for certiorari, reversed the trial court’s orders, and allowed the deposition; reconsideration was denied on May 11, 2011.
The Supreme Court (Second Division) issued the Decision on June 15, 2016, denying the petitions for lack of merit and affirming the Court of Appeals’ reversal of the trial court’s denial.

Facts

Cleary is an American citizen and Los Angeles resident who entered a Stock Purchase and Put Agreement with Miranila Land Development Corporation, Manuel S. Go, Ingrid Sala Santamaria, Astrid Sala Boza, and Kathryn Go-Perez, and paid US$191,250.00 for shares.
Paragraph 9.02 of the Agreement granted Cleary sole discretion to bring any suit in (a) the courts of the State of California, (b) the United States District Court for the Central District of California, or (c) the courts of the country of the corporation’s incorporation, and the parties waived other preferential jurisdiction by reason of domicile.
Cleary elected to file the suit in Cebu, Philippines.
Cleary moved to take his deposition in Los Angeles before the Philippine Consulate so it could be used as his direct testimony; petitioners opposed on grounds that deposition-taking should not replace open-court testimony and would prejudice petitioners who are Philippines-based.
Trial court reasons for denial: depositions are not a substitute for in-court testimony; Rule 132, Section 1 requires presentation for oral examination at trial; the plaintiff (Cleary) had no impairment and therefore should appear in court.
Cleary argued he was “out of the Philippines,” relied on Rule 23, Section 4(c)(2), cited jurisprudence permitting depositions of out-of-country witnesses, and contended the trial court’s denial amounted to grave abuse of discretion.

Issues Presented

Whether the limitations for the taking of deposition under Rule 23, Section 16 of the Rules of Court apply in this case so as to justify the trial court’s denial.
Whether the taking and use of a deposition under Rule 23, Section 4(c)(2) of the Rules of Court applies to a non-resident foreign plaintiff’s direct testimony (i.e., whether a foreign plaintiff “out of the Philippines” may have his direct testimony presented by deposition taken abroad).

Relevant Rules and Provisions (as quoted or referenced in the source)

Rule 23, Section 1 (Depositions pending action, when may be taken): permits testimony of any person, whether a party or not, to be taken by deposition upon oral examination or written interrogatories by leave of court after jurisdiction or without leave after answer has been served; attendance may be compelled by subpoena.
Rule 23, Section 4(c) (Use of depositions) — enumerates when a deposition “may be used by any party for any purpose” if the court finds, inter alia: (1) witness is dead; (2) witness resides at a distance more than 100 kilometers from place of trial or is out of the Philippines (unless absence was procured by offering party); (3) witness is unable to attend due to age, sickness, infirmity or imprisonment; (4) party offering deposition unable to procure attendance by subpoena; (5) exceptional circumstances making use desirable in interest of justice with due regard to importance of oral testimony in open court.
Rule 23, Section 16 (Orders for the protection of parties and deponents): after notice for taking deposition by oral examination, upon motion seasonably made and for good cause shown, the court may order that deposition not be taken, be taken only at a designated place, be taken only on written interrogatories, exclude certain matters, limit attendance, seal the deposition, etc.
Rule 23, Section 6 (Objections to admissibility): objections to receiving deposition in evidence may be made at trial for reasons that would exclude the evidence if witness were present.
Rule 23, Section 29 (Effect of errors and irregularities): objections to competency and relevancy are preserved absent grounds which could have been obviated if presented earlier.
Rule 23, Section 25 (Deposition upon written interrogatories): provides the mechanics for written interrogatories and cross/re-direct/recross interrogatories.
Rule 132, Section 1 (examining witnesses in open court) referenced in parties’ and trial court’s arguments.
General principle stated in jurisprudence as cited: the rules allow broad freedom to take depositions but impose circumscribed limitations on their use at trial.

Trial Court’s Ruling and Reasoning

The trial court (Order dated June 5, 2009) denied Cleary’s Motion to take deposition in Los Angeles and denied reconsideration.
Primary grounds stated by the trial court:
- Depositions are not intended to substitute for actual testimony in open court; per Rule 132, Section 1 a deponent must be presented for oral examination at trial.
- Cleary, being the plaintiff and not suffering from any physical impairment, should appear and testify under oath before the RTC so the court and parties may observe his demeanor and directly propound questions.
- The trial court emphasized that because Cleary elected to seek judicial relief in the Philippines he should submit to Philippine court processes and procedures.

Court of Appeals’ Decision

The Court of Appeals granted Cleary’s petition for certiorari and reversed the trial court’s denial (Decision dated August 10, 2010).
The Court of Appeals held that Rule 23, Section 1 allows the taking of depositions and that it is immaterial that Cleary was the plaintiff;