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NG MENG TAM v. CHINA BANKING CORPORATION

FACTS:

This case involves a collection suit filed by China Banking Corporation (China Bank) against Ever Electrical Manufacturing Company Inc. (Ever) and other defendants. China Bank alleged that it granted Ever a loan, which was backed by two surety agreements executed by the defendants. When Ever defaulted on its payment, China Bank filed a complaint for collection.

The petitioner, Ng Meng Tam, one of the defendants, argued that the surety agreements were null and void and that he did not receive any demand letter. He also moved for the hearing of his affirmative defenses based on the statute of limitations and laches, but the motion was denied initially. However, on appeal, the Court of Appeals ruled that a preliminary hearing was proper.

During the proceedings, the petitioner served interrogatories to parties to China Bank and required George Yap, an account officer, to answer. China Bank objected to the petitioner's motion to examine Yap without executing a judicial affidavit, citing the Judicial Affidavit Rule (JAR). The RTC denied the petitioner's motion, ruling that Section 5 of the JAR did not apply to Yap, who was considered an adverse witness. The RTC also stated that Yap's answers to the interrogatories did not comply with the requirements of the JAR.

The petitioner moved for reconsideration, but it was denied by the RTC. As a result, the petitioner filed a petition for review to the Supreme Court, arguing that the RTC's interpretation of Section 5 of the JAR was erroneous and contrary to its wording, practical intention, and common sense. The petitioner also claimed that the RTC disregarded the relevant rules on the mode of discovery for the presentation of adverse witnesses.

ISSUES:

  1. Whether RTC committed an error of law in interpreting Section 5 of the Judicial Affidavit Rule (JAR).

  2. Whether RTC's interpretation of Section 5 of the JAR disregarded relevant rules on the mode of discovery.

  3. Whether RTC's interpretation of Section 5 of the JAR is correct and whether sanctions should be provided for adverse or hostile witnesses who refuse to execute judicial affidavits.

  4. Whether or not the rules in presentation of adverse party witnesses as provided for under the Rules of Court shall apply in this case.

  5. Whether or not the Regional Trial Court (RTC) should proceed with the presentation of Mr. Yap as a witness.

  6. What is the proper remedy when a court renders a decision with conflicting dispositive portions?

RULING:

  1. The Supreme Court granted the petition and held that Section 5 of the JAR does not apply to adverse party witnesses. The Court ruled that adverse party witnesses and hostile witnesses are excluded from the scope of Section 5. Therefore, regardless of whether the requested witness unjustifiably declines to execute a judicial affidavit or refuses to present documents, Section 5 cannot be made to apply to adverse party witnesses. The Court also noted that the JAR is silent on the procedure to be followed for adverse or hostile witnesses.

  2. Yes, the rules in presentation of adverse party witnesses as provided for under the Rules of Court shall apply in this case. Section 5 of the Judicial Affidavit Rule (JAR) expressly excludes adverse party and hostile witnesses from its application.

  3. Yes, the RTC should proceed with the presentation of Mr. Yap as a witness. The parties have already complied with Section 6 of Rule 25 of the Rules of Court by furnishing and answering interrogatories. Being an adverse party witness, Mr. Yap is not within the scope of Section 5 of the JAR.

  4. The conflicting dispositive portions of the decision are set aside. The court does not provide a ruling on the proper remedy in this situation.

PRINCIPLES:

  • The express mention of one person, thing, or consequence implies the exclusion of all others (expressio unius est exclusion alterius).

  • Adverse party witnesses and hostile witnesses are excluded from the application of Section 5 of the JAR.

  • When the law is silent on a particular issue, the court may resort to other legal principles or rules to fill the gap.

  • Section 12, Rule 132 of the Rules of Court provides that a witness may be considered unwilling or hostile only if so declared by the court upon adequate showing of his adverse interest, unjustified reluctance to testify, or his having misled the party into calling him to the witness stand. The adverse party witness may be impeached and cross-examined by the adverse party, but such cross-examination must only be on the subject matter of his examination-in-chief. Evidence of the witness' bad character is not admissible.

  • Section 6, Rule 25 of the Rules of Court states that unless allowed by the court for good cause shown and to prevent a failure of justice, a party not served with written interrogatories may not be compelled by the adverse party to give testimony in open court or to give a deposition pending appeal.

  • The purpose of the rule requiring the prior service of written interrogatories on the adverse party is to prevent fishing expeditions, delays, and harassment. Written interrogatories aid the court in limiting harassment and help to focus on what is essential to the case. By requiring prior written interrogatories, the court may limit the inquiry to what is relevant and prevent the calling party from straying or harassing the adverse party when it takes the latter to the stand.

  • Calling the adverse party to the witness stand may result in the calling party damaging its own case since the calling party is bound by the adverse party's testimony. Therefore, if a party cannot elicit facts or information useful to its case through the facility of written interrogatories or other mode of discovery, the calling of the adverse party to the witness stand could weaken its own case.

  • When a court renders a decision with conflicting dispositive portions, the conflicting portions should be set aside.