NG MENG TAM, PETITIONER, VS. CHINA BANKING CORPORATION, RESPONDENT.

Ng Meng Tam versus China Banking Corporation

The Case

This is a petition for review filed directly with the Supreme Court by Ng Meng Tam against China Banking Corporation, arising from a collection suit. The petitioner, a surety being sued on two surety agreements, wanted to call the bank's account officer, George Yap, to the witness stand as an adverse or hostile witness without first securing that witness's judicial affidavit. The bank objected, invoking the Judicial Affidavit Rule. The case matters because it fixes the exact scope of Section 5 of the Judicial Affidavit Rule — who is covered by it, who is expressly excluded, and what procedure governs when the witness a party wants to present is the adverse party's own witness or a hostile witness.

Procedural History

China Bank filed a complaint for collection against Ever Electrical Manufacturing Company, the heirs of Go Tong, Vicente Go, George Go, and Ng Meng Tam. The case was raffled to Branch 62 of the Regional Trial Court of Makati City. The petitioner moved that his affirmative defenses be heard preliminarily, but the trial court denied the motion. On appeal, the Court of Appeals ruled that a preliminary hearing was proper under the Rules of Court, and that decision became final and executory.

The case was later re-raffled to Branch 139 of the Regional Trial Court of Makati City. The petitioner again moved for a hearing of his affirmative defenses. Finding the answers to interrogatories evasive, he applied for a subpoena against George Yap. When the case was called for Yap's presentation, China Bank objected, citing Section 5 of the Judicial Affidavit Rule, arguing that Yap could not be compelled to testify without a judicial affidavit. The trial court denied the petitioner's motion in its May 28, 2014 Order, and denied reconsideration in its August 27, 2014 Order. The petitioner then filed this petition for review directly with the Supreme Court.

Facts

Sometime in December 2008, China Bank sued Ever Electrical Manufacturing Company and several individuals, including Ng Meng Tam, to collect a loan of 5,532,331 pesos and 63 centavos. The bank alleged that the loan was secured by two surety agreements executed by Vicente Go, George Go, and the petitioner, each for 5,000,000 pesos, dated December 9, 1993 and May 3, 1995. When Ever defaulted, the bank sent demand letters, which went unanswered.

In his Answer, the petitioner alleged that the surety agreements were null and void because they were executed before the loan was granted in 2004, that they were contracts of adhesion, and that he never received any demand letter. He moved for a preliminary hearing on his affirmative defenses. The Court of Appeals ruled that such a hearing was proper, and that ruling became final.

The petitioner served written interrogatories on China Bank, and George Yap, the bank's account officer, answered them. Finding the answers evasive, the petitioner applied for a subpoena to compel Yap to testify. When Yap was called, China Bank objected, saying no judicial affidavit had been secured. The trial court ruled that Section 5 did not apply to Yap because he was an adverse witness and had not unjustifiably declined to execute a judicial affidavit. The petitioner brought the matter to the Supreme Court.

Issues

• Whether or not Section 5 of the Judicial Affidavit Rule applies to adverse party witnesses and hostile witnesses.
• Whether or not the trial court erred in requiring a showing that the witness unjustifiably refused to execute a judicial affidavit before Section 5 could apply.
• Whether or not the Rules of Court on the presentation of adverse party witnesses govern when the Judicial Affidavit Rule is silent.

Applicable Provisions

Section 5 of the Judicial Affidavit Rule provides:

Sec. 5. Subpoena. – If the government employee or official, or the requested witness, who is neither the witness of the adverse party nor a hostile witness, unjustifiably declines to execute a judicial affidavit or refuses without just cause to make the relevant books, documents, or other things under his control available for copying, authentication, and eventual production in court, the requesting party may avail himself of the issuance of a subpoena ad testificandum or duces tecum under Rule 21 of the Rules of Court. The rules governing the issuance of a subpoena to the witness in this case shall be the same as when taking his deposition except that the taking of a judicial affidavit shall be understood to be ex parte.

This provision is the very text the Court construes, and its express exclusion of the adverse party's witness and the hostile witness is the basis for holding that it cannot reach George Yap.

Section 12 of the Judicial Affidavit Rule provides:

Sec. 12. Effectivity. – This rule shall take effect on January 1, 2013 following its publication in two newspapers of general circulation not later than September 15, 2012. It shall also apply to existing cases.

This provision makes the Judicial Affidavit Rule applicable to the pending collection suit.

Section 12, Rule 132 of the Rules of Court provides:

SEC. 12. Party may not impeach his own witness. – Except with respect to witnesses referred to in paragraphs (d) and (e) of Section 10, the party producing a witness is not allowed to impeach his credibility. A witness may be considered as 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 unwilling or hostile witness so declared, or the witness who is an adverse party, may be impeached by the party presenting him in all respects as if he had been called by the adverse party, except by evidence of his bad character. He may also 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.

This provision supplies the procedure for qualifying and presenting a hostile or adverse party witness, which the Court applies because the Judicial Affidavit Rule is silent on the point.

Section 6, Rule 25 of the Rules of Court provides:

SEC. 6. Effect of failure to serve written interrogatories. – Unless thereafter 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.

This provision is the condition the petitioner satisfied, since written interrogatories were served and answered, allowing the adverse party witness to be called to the stand.

Ruling

On the first issue, the Court held that Section 5 of the Judicial Affidavit Rule does not apply to adverse party witnesses and hostile witnesses. The provision contemplates a government employee or official, or a requested witness, who is neither the witness of the adverse party nor a hostile witness. Applying the maxim expressio unius est exclusion alterius — the express mention of one person, thing, or consequence implies the exclusion of all others — the Court ruled that adverse party witnesses and hostile witnesses, being expressly excluded, are not covered. Since George Yap was the adverse party's witness, Section 5 could not be made to apply to him regardless of whether he declined to execute a judicial affidavit.

On the second issue, the Court disagreed with the trial court's requirement that the witness must be shown to have unjustifiably refused to execute a judicial affidavit. Because Yap fell within the group expressly exempt from Section 5, that condition was irrelevant to him.

On the third issue, the Court held that since the Judicial Affidavit Rule is silent on the procedure for adverse party and hostile witnesses, the Rules of Court govern. The Court quoted Section 12, Rule 132 of the Rules of Court, and held that before a party may qualify an adverse party witness, the party must comply with Section 6, Rule 25 of the Rules of Court. The Court relied on its earlier ruling that in civil cases, the procedure of calling the adverse party to the witness stand is not allowed unless written interrogatories are first served. Here, the parties had furnished and answered interrogatories, so the requirement was satisfied. The Court concluded that there was no reason for the trial court not to proceed with the presentation of Yap as a witness.

Doctrine

Section 5 of the Judicial Affidavit Rule expressly excludes from its application adverse party witnesses and hostile witnesses. The express mention of the government employee or official and the requested witness who is neither the adverse party's witness nor a hostile witness implies the exclusion of all others, under the maxim expressio unius est exclusion alterius. For the presentation of adverse party and hostile witnesses, the Judicial Affidavit Rule being silent, the provisions of the Rules of Court — the Revised Rules of Evidence and all correlative rules, including the modes of deposition and discovery — shall apply. Before a party may qualify an adverse party witness under Section 12, Rule 132 of the Rules of Court, that party must first comply with Section 6, Rule 25 of the Rules of Court by serving written interrogatories, a requirement meant to prevent fishing expeditions, harassment, and needless delays.

Disposition

The petition was granted, and the May 28, 2014 and August 27, 2014 Orders of the Regional Trial Court, Branch 139, Makati City were annulled and set aside, with no pronouncement as to costs.

Remember This

Memorize this line: Section 5 of the Judicial Affidavit Rule covers only the government employee or official, or the requested witness who is neither the adverse party's witness nor a hostile witness — adverse party and hostile witnesses are expressly excluded, and for them the Rules of Court apply. Examiners like to use this case to test the scope of the Judicial Affidavit Rule and the requirement of prior written interrogatories under Section 6, Rule 25 before an adverse party witness may be compelled to testify.