G.R. No. 217360 , November 13, 2019
BDO Strategic Holdings, Inc. (formerly EBC Strategic Holdings, Inc.) and Banco de Oro Unibank, Inc. (formerly Equitable PCI Bank, Inc.), Petitioners, vs. Asia Amalgamated Holdings Corporation, Respondent.

FACTS

Respondent Asia Amalgamated Holdings Corporation filed a complaint for declaration of nullity of contract and damages against petitioners. The trial commenced, with respondent’s majority shareholder, Mr. Jimmy Gow, presented as the first witness. His cross-examination spanned several hearing dates. On December 10, 2012, the cross-examination was suspended after petitioners filed a request for issuance of a subpoena duces tecum, which was granted. Petitioners insisted on compliance with the subpoena before continuing the cross-examination. On February 1, 2013, pending resolution of respondent’s motion to quash the subpoena, petitioner BDO Strategic Holdings, Inc. filed written interrogatories addressed to respondent. The Regional Trial Court (RTC) issued an Order on April 29, 2013, granting the motion to quash the subpoena and denying the taking of the written interrogatories, finding they would not facilitate the disposition of the case. Petitioners’ motions for reconsideration were denied. The Court of Appeals (CA), in a Decision dated September 30, 2014, reversed the quashal of the subpoena but affirmed the disallowance of the written interrogatories. The CA denied petitioners’ Motion for Partial Reconsideration on March 10, 2015.

ISSUE

Whether the Court of Appeals committed a reversible error in affirming the disallowance of the written interrogatories addressed to respondent.

RULING

The Petition is denied. The Supreme Court affirmed the CA Decision and Resolution. While modes of discovery like depositions are encouraged to promote the just, speedy, and inexpensive disposition of actions, this right is not absolute. The Rules of Court provide limitations, such as when the examination is conducted in bad faith or to annoy, embarrass, or oppress, or when it touches upon irrelevant or privileged matters. Courts enjoy considerable discretion in discovery matters. Under Rule 23, Section 16 of the Rules of Court, a court may, for good cause, order that a deposition not be taken. Good cause means a substantial reason affording a legal excuse. The court’s exercise of discretion will not be set aside absent an abuse affecting substantial rights. Petitioners failed to establish that the RTC’s disallowance was arbitrary, capricious, or oppressive. Respondent showed good cause, as the case was already at the cross-examination stage, and the written interrogatories—comprising 561 questions—would not aid preparation or speedy disposition but would cause further delay. The facts sought could be extracted through continued cross-examination. The Supreme Court upheld the factual findings of the lower courts, noting it is not a trier of facts, and the trial court is in a better position to examine evidence and observe witness demeanor. The mere allegation by petitioners that the interrogatories were relevant and not in bad faith was insufficient to overturn these findings.