G.R. No. 204700; April 10, 2013
EAGLERIDGE DEVELOPMENT CORPORATION, MARCELO N. NAVAL and CRISPIN I. OBEN, Petitioners, vs. CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Respondent.

FACTS

Petitioners Eagleridge Development Corporation (EDC), Marcelo N. Naval, and Crispin I. Oben are defendants in a collection suit filed by Export and Industry Bank (EIB) before the Regional Trial Court (RTC) of Makati City. By virtue of a Deed of Assignment dated August 9, 2006, EIB transferred EDC’s outstanding loan obligation to respondent Cameron Granville 3 Asset Management, Inc. (Cameron), a special purpose vehicle. The Deed of Assignment referenced a Loan Sale and Purchase Agreement (LSPA) dated April 7, 2006. Cameron was substituted as plaintiff in the pending case. Petitioners filed a Motion for Production/Inspection of the LSPA, arguing it was necessary to determine the consideration paid for the assignment, as under Article 1634 of the Civil Code, a debtor may extinguish a credit in litigation by reimbursing the assignee the price paid. The RTC denied the motion, finding no “good cause” and that the LSPA was irrelevant. The Court of Appeals dismissed petitioners’ Petition for Certiorari, initially on technical grounds (a defective verification/certification by Oben and a missing complaint copy) and ultimately on the merits, finding no grave abuse of discretion by the RTC.

ISSUE

1. Whether the Court of Appeals erred in dismissing the petition on technicality.
2. Whether the RTC gravely abused its discretion in denying the motion for production/inspection of the LSPA.

RULING

1. On the technical grounds: The Supreme Court held the Court of Appeals erred in finding Oben’s Verification and Certification defective. Oben signed in his personal capacity as an impleaded party, not as a representative of EDC. A separate verification by Naval for himself and EDC, with proper authority, was already filed. Regarding the complaint copy, while a machine copy was belatedly attached, Rule 65 allows machine copies of relevant pleadings. The dismissal was primarily based on the finding of no grave abuse of discretion by the RTC.
2. On the denial of the motion for production: The Supreme Court ruled that the RTC committed grave abuse of discretion. The LSPA is directly relevant and material. The Deed of Assignment expressly referred to and incorporated the LSPA, which defined terms used in the Deed. Petitioners’ right to potentially extinguish the obligation under Article 1634 of the Civil Code by reimbursing the price paid makes the consideration stated in the LSPA a crucial fact. The trial court’s duty to ensure a fair opportunity to present evidence requires allowing inspection of documents foundational to the plaintiff’s claim. Litigation is not a game of skills but a search for truth, and both parties must have access to material evidence. The RTC’s denial, based on a restrictive view of “good cause” and relevance, was a capricious and whimsical exercise of judgment. The case was remanded to the RTC with instructions to grant the motion for production/inspection.