Koh vs.

Intermediate Appellate Court, September 23, 1986

Facts:

Respondent Bank filed a Complaint against Koh to recover the money due to a computer error it had overpaid to her.
Petitioner's father sent her money through the Metropolitan Bank & Trust Company which was the remitting bank of
respondent Bank. But due to computer mistake, respondent Bank's Los Angeles Office erroneously overstated the amount,
& as a consequence respondent Bank issued & delivered to petitioner a Cashier Check amounting to a wrong amount
which petitioner deposited to her account & subsequently withdrew.

Petitioner admitted the allegations in the Complaint & alleged that immediately after receipt of a formal demand letter to
return the overpayment, she offered to pay respondent Bank through its lawyer in installments of $100.00 a month but the
offer was unreasonably rejected. The Officer-in-Charge of the RTC, sent the "NOTICE OF CASE STATUS" to the
parties through their respective lawyer. No manifestation was filed by the parties' lawyers, hence the case was dismissed.

Respondent Bank, through a new counsel, refiled its complaint which was presided over by respondent Judge. Petitioner
filed a motion to dismiss the complaint on the ground of res adjudicata, which was opposed by respondent Bank.

Issue: WON the order dismissing the 1st complaint constituted a bar to the 2nd complaint. NO

Held: The order dismissing the 1st complaint didn't operate as an adjudication on the merits of the 2 nd complaint. RTC
could’ve, on motion, rendered a judgment on the pleadings in the 1 st case in favor of respondent Bank.

The rules on discovery are intended to enable a party to obtain knowledge of material facts within the knowledge of the
adverse party/of 3rd parties through depositions to obtain knowledge of material facts/admissions from the adverse party
through written interrogatories; to obtain admissions from the adverse party regarding the genuineness of relevant
documents/relevant matters of fact through requests for admission; to inspect relevant documents/objects & lands/other
property in the possession/control of the adverse party; & to determine the physical/mental condition of a party when such
is in controversy. This mutual discovery enables a party to discover the evidence of the adverse party & thus facilitates an
amicable settlement/expedites the trial of the case. All the parties are required to lay their cards on the table so that justice
can be rendered on the merits of the case.

Trial judges should, therefore, encourage the proper utilization of the rules on discovery. However, recourse to discovery
procedures is not mandatory. If the parties do not choose to resort to such procedures, the pre-trial conference should be
set pursuant to the mandatory provisions of Section 1 of Rule 20.

Petitioner’s counterclaim for damages resulting from the filing of the complaint did not require an answer. Since the
counterclaim was the last pleading, the court should have issued a pre-trial order after its submission & it was the duty of
the clerk of court to place the case in the pre-trial calendar under Section 5 of Rule 20. The "notice of case status" was not
an order of the court. It was signed by the officer-in-charge. Even the warning in the notice (that if no such manifestation
has been filed after 30 days from receipt the case shall be dismissed as the case may be) was ambiguous. The failure of the
parties to heed the warning did not constitute disobedience of a lawful order of the court. Consequently, the order of
dismissal could not have the effect of an adjudication upon the merits. Neither could respondent Bank be considered to
have failed to prosecute its action for an unreasonable length of time.

Section 1 of Rule 14 expressly provides that upon the filing of the complaint, the clerk of court shall forthwith issue the
corresponding summons to the defendant. Sections 1 and 5 of Rule 20 authorize the clerk of court to issue the notice of
the date of the pre-trial and Section 2 of Rule 22 authorizes the clerk of court to issue the notice of the date of the trial. A
writ of execution may be issued by the clerk of court pursuant to an order of execution signed by the judge. There is no
rule authorizing the issuance of the "notice of case status" in question signed by an officer-in-charge.

SC affirms the decision of the CA which dismissed the petition for certiorari filed by petitioner against respondent Judge
Madayag of the RTC & respondent First Interstate Bank of California. Petitioner sought to annul & set aside the order of
respondent Judge denying her motion to dismiss the complaint based on res adjudicate.

PCGG vs. Sandiganbayan, November 21, 1991

Facts: The case was commenced by the PCGG in behalf of the Republic. After having been served with summons, 2
respondents, instead of filing their answer, jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE
COMPLAINT & FOR BILL OF PARTICULARS OF OTHER PORTIONS”. The PCGG filed an opposition thereto, &
the movants, a reply to the opposition.  Sandiganbayan, in order to expedite proceedings & accommodate the defendants,
gave the PCGG 45 days to expand its complaint to make more specific certain allegations. 

Tantoco & Santiago presented a “Motion for Leave to File Interrogatories” under Rule 25, seeking an answer to the
question: "Who were the Commissioners of the PCGG who approved or authorized the inclusion of them as defendants of
the case?"  The PCGG responded by filing a motion to strike out said motion & interrogatories as being impertinent as the
purpose thereof lacks merit. PCGG filed its expanded complaint, Tantoco & Santiago reiterated their motion for bill of
particulars, through a Manifestation, which was denied by Sandiganbayan. The case was set for pre-trial, and the 2 filed
“Interrogatories to Plaintiff”, as well as a Motion for Production & Inspection of Documents. Sandiganbayan admitted the
Amended Interrogatories & granted the motion for production & inspection of documents. After hearing, the
Sandiganbayan denied the reconsideration (of the Resolution allowing production of documents), & the permission to
serve the amended interrogatories on PCGG.

Held:

The resolution of controversies is the raison d'etre of courts. This essential function is accomplished by 1st, the
ascertainment of all the material & relevant facts from the pleadings & from the evidence adduced by the parties, and  2nd,
after that determination of the facts has been completed, by the application of the law thereto to the end that the
controversy may be settled authoritatively, definitely & finally. A litigation is not a game of technicalities. It is, rather a
contest in which each contending party fully & fairly lays before the court the facts in issue & then brushing aside as
wholly trivial & indecisive all imperfections of form & technicalities of procedure, asks that justice be done on the merits.
Initially, that undertaking of laying the facts before the court is accomplished by the pleadings filed by the parties; but
that, only in a very general way. Only "ultimate facts" are set forth in the pleadings.

The deposition-discovery procedure was designed to remedy the conceded inadequacy of the pre-trial functions of notice-
giving, issue-formulation & fact revelation theretofore performed primarily by the pleadings.
The various modes of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to
narrow & clarify the basic issues between the parties, & (2) as a device for ascertaining the facts relative to those issues.
The evident purpose is to enable parties, consistent with recognized privileges, to obtain the fullest possible knowledge of
the issues & facts before trials & thus prevent that said trials are carried on in the dark. 
The inquiry extends to all facts which are relevant, whether they be ultimate/evidentiary, excepting only those matters
which are privileged. The objective is as much to give every party the fullest possible information of all the relevant facts
before the trial as to obtain evidence for use upon said trial. The principle is reflected in Section 2, Rule 24 (governing
depositions). 

Leave of court is not necessary to avail of said modes of discovery after an answer to the complaint has been served.   It is
only when an answer has not yet been filed (but after jurisdiction has been obtained over the defendant/property subject of
the action) that prior leave of court is needed to avail of these modes of discovery, the reason being that at that time the
issues are not yet joined & the disputed facts are not clear. On the other hand, leave of court is required as regards
discovery by (a) production or inspection of documents/things in accordance with Rule 27, or (b) physical & mental
examination of persons under Rule 28, which may be granted upon due application and a showing of due cause.
Sanctions on the party who refuses to make discovery: dismissing the action or proceeding/part thereof, or rendering
judgment by default against the disobedient party; contempt of court, or arrest of the party/agent of the party; payment of
the amount of reasonable expenses incurred in obtaining a court order to compel discovery; taking the matters inquired
into as established in accordance with the claim of the party seeking discovery; refusal to allow the disobedient party
support or oppose designated claims or defenses; striking out pleadings or parts thereof; staying further proceedings. 
It was correct for the private respondents to seek leave to serve interrogatories, because discovery was being availed
of before an answer had been served. But there was no need for them to seek such leave to serve their "Amended
Interrogatories to Plaintiff" after they had filed their answer to the PCGG's complaint, just as there was no need for the
Sandiganbayan to act thereon.
The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if the party served
with interrogatories is a juridical entity such as "a public/private corporation or a partnership or association," the same
shall be "answered by any officer thereof competent to testify in its behalf." The interrogatories are made to relate to
individual paragraphs of the PCGG's expanded complaint & inquire about details of the ultimate facts therein alleged.
What the PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of relevancy,
or privilege, or that the inquiries are being made in bad faith, or simply to embarrass or oppress it.   But until such an
objection is presented and sustained, the obligation to answer subsists.
It is the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all parties even
before trial, this being deemed essential to proper litigation. This is why either party may compel the other to disgorge
whatever facts he has in his possession; and the stage at which disclosure of evidence is made is advanced from the time
of trial to the period preceding it.