GR 97654; (November, 1994) (Digest)
G.R. No. 97654 November 14, 1994
INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. THE HON. COURT OF APPEALS, THIRTEENTH DIVISION, THE HON. BIENVENIDO V. REYES, Presiding Judge, Regional Trial Court, Fourth Judicial Region, San Pablo City, Branch 29, RICARDO L. BRUCAL, OFELIA A. BRUCAL and DONNA A. BRUCAL, respondents.
FACTS
On April 4, 1989, private respondents Ofelia A. Brucal and Donna A. Brucal, claiming to be the designated beneficiaries, filed an action against petitioner Insular Life Assurance Co., Ltd. to recover the proceeds of a life insurance policy covering Horacio Aquino. In its answer, Insular Life contended the policy was null due to gross misrepresentation and material concealment, and that the death was deliberate, not accidental. Insular Life filed a motion for leave to file a third-party complaint against Ricardo Brucal (husband of Ofelia), alleging he forged the signature on the insurance application. The trial court granted the motion. During proceedings, Insular Life sent private respondents a request for admission and written interrogatories. The trial court, in its March 13, 1990 Order, directed private respondents to answer the interrogatories within ten days. Private respondents failed to answer. On June 20, 1990, Insular Life filed a motion to dismiss the complaint and to declare third-party defendant Ricardo Brucal in default due to this failure. The trial court, in its July 5, 1990 Order, denied the motion, holding that substantial justice would be better served if the case were decided on the merits. Insular Life filed a petition for certiorari with the Court of Appeals, which denied the petition on January 7, 1991, sustaining the trial court. Insular Life then elevated the case to the Supreme Court via petition for review on certiorari.
ISSUE
Whether the trial court committed grave abuse of discretion in denying Insular Life’s motion to dismiss the complaint and to declare the third-party defendant in default for private respondents’ failure to answer written interrogatories, contrary to the sanctions provided under Section 5, Rule 29 of the Revised Rules of Court.
RULING
The Supreme Court ruled that the trial court did not commit grave abuse of discretion. The petition was DENIED. The Decision of the Court of Appeals was AFFIRMED, and the case was REMANDED to the Regional Trial Court for resolution on the merits.
The Court held that while Section 5, Rule 29 of the Revised Rules of Court provides sanctions, including dismissal or default, for a party’s willful failure to serve answers to interrogatories, the application of these sanctions rests primarily on the sound discretion of the trial court, with the paramount interest of justice in mind. The trial court, in opting to decide the case on its merits, liberally applied the procedural rules. It considered that the interrogatories could be propounded to witnesses during trial and that the matters sought could be proved by Insular Life’s own evidence. The appellate court correctly found no capricious or whimsical exercise of judgment equivalent to grave abuse of discretion. The Supreme Court emphasized that while discovery rules are vital for simplifying issues and expediting case disposition, they should not be used to override substantial justice. The trial court’s discretion was not exercised in a manner so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law.