LIME CORPORATION OF THE PHILIPPINES, PARSONS HARDWARE COMPANY, INC., MONTALBAN LIME CORPORATION, WILLIAM PARSONS, RESTITUTO YNCHAUSTI, AND ISIDRO SANTIAGO, PETITIONERS, VS. MANU…

In these proceedings the petitioners ask that the respondent judge be
prohibited from enforcing the order of the Court of First Instance of
Manila of November 4, 1933, which directed the petitioners to produce
at the taking of the depositions of Restituto Ynchausti and Isidro
Santiago “such part of the records of the Lime Corporation of the
Philippines as will show the source and disposition of all transactions
of said corporation with any and all of the other defendants in the
case, either in the nature of money borrowed or credits extended or
merchandise sold or delivered, together with the corresponding
supporting vouchers.” The question is if the language of the order,
with its corresponding subpoena duces tecum, requiring the
production of documents in the possession of an adverse party, is
sufficiently specific and if the documents sought are material to
petitioners’ case. The question calls for the reexamination of the law
with reference to the place of the bill of discovery in Philippine
jurisprudence and for a restatement of the basic principles governing
the issuance of a bill of discovery.

On October 24, 1932, A.
de Marcaida y Cia., S. en C., plaintiff, filed a complaint in the Court
of First Instance of Manila, which sought the rescission of a contract
and an accounting with damages from the defendants William Parsons,
Parsons Hardware Company, Inc., Lime Corporation of the Philippines,
and Montalban Lime Corporation. In regular course, the defendants
presented their answers with special defenses. Thereafter and before
trial, an order was promulgated which provided for the taking of the
depositions of Restituto Ynchausti and Isidro Santiago. In connection
with the taking of the depositions, a subpoena duces tecum
was issued addressed to the secretary-treasurer of the Lime Corporation
of the Philippines, which required the production of certain books and
records. However, pursuant to the stipulation of the parties, the Lime
Corporation of the Philippines permitted the plaintiff and its
representatives to examine the books and records listed in the subpoena duces tecum
in the offices of the corporation. It was only when a dispute arose
between the parties as to what particular books and records of the Lime
Corporation could be inspected by the agents of the plaintiff that the
matter was a second time brought to the attention of the trial court.
Thereupon, Judge Diaz approved an order, in the form set out in the
beginning of this decision, for the production of the specified records
of the Lime Corporation. The attorneys for the defendants protested in
a motion for reconsideration, but this motion was overruled in an order
handed down by Judge Moran then sitting in the branch of the Court of
First Instance of Manila to which the case appertained.
Parenthetically, since we are disposing of the facts, it may be said
that in argument here both parties have been guilty of importing
matters into the record which have to do with the merits of the case,
and not the issue of jurisdiction or lack of jurisdiction, which is to
be decided in prohibition proceedings.

Trial practice in the
Philippines is governed mainly by the Codes of Civil and Criminal
Procedure, as amended, and slightly by rules of court. In neither the
codes nor the rules is any mention made of a bill of discovery. Under
code practice, therefore, doubt might well arise as to the existence of
a bill of discovery in this jurisdiction. Our law such as it is on
analogous subject comes from the State of California, and there it is
well to observe that uncertainty persists relative to whether a bill of
discovery may be maintained under the California system of procedure.
However, our Civil Procedural Code, in section 355, authorizes the
examination under deposition de bene esse of a party to an
action or special proceeding, or an officer or a member of a
corporation which is a party to an action or special proceeding, and in
section 402, authorizes the issuance of a subpoena duces tecum
for the compulsory production of books and documents under the control
of the witness. And this court, in at least two cases, has seen fit to
recognize a bill of discovery. (Tan Chico vs. Conception and Asia Banking Corporation [1922], 43 Phil., 141; Everett vs. Asia Banking Corporation [1926], 49 Phil, 512. See further Liebenow vs. Philippine Vegetable Oil Co. [1918], 39 Phil., 60; and Frank & Company vs.
Clemente [1922], 44 Phil., 30.) Accepting these authorities at their
face value, we can take it for granted that there exists in the
Philippines a remedy analogous to a bill of discovery.

At this point a little further consideration should be given to the decision in Tan Chico vs. Concepcion and Asia Banking Corporation, supra. This was a petition for certiorari. The subpoena duces tecum
which was issued required the defendant and his attorney to appear at
the time and place fixed in the notice and to bring with him or them
the following documents: “All correspondence between the F. A. Thompson
Commercial Co. and the said Tan Chico and all documents and writings of
every nature with relation to the order for the merchandise which is
the subject of this action, and especially the confirmation in writing
by the F. A. Thompson Commercial Co. of the cancellation of said order
referred to by the defendant in the fourth special defense.” It was
held, and we think properly, that the court did not exceed its
jurisdiction in issuing the subpoena in question. However, in the body of the decision is to be found language in the nature of obiter dicta which appears to authorize “fishing expeditions”, and to this language we are unable to subscribe.

Conceding, therefore, that a remedy analogous to a bill of discovery
can be made use of in proper cases, it is now timely to determine, with
particular reference to the facts before us, if this is a proper case.
In this connection, it should be recalled that the parties are
operating under section 355 of the Code of Civil Procedure relating to
the taking of the deposition of a witness within the Philippine
Islands, and under section 402 of the Code of Civil Procedure
recognizing a subpoena duces tecum. It is accordingly too
plain for words that the parties are bound to observe the law as found
in the sections under which they presume to act. It is likewise
self-evident that it is for the trial court to guide the parties in
their actions and that the trial court retains a discretionary control
over the proceedings, for otherwise the use of the remedy would be
susceptible to grave abuse. It is further perfectly plain that the
remedy applies only to relevant documents sufficiently described and
existing in the opponent’s possession or under his control. The test to
be applied by the trial judge in determining the relevancy of documents
and the sufficiency of their description is one of reasonableness and
practicability. As a corollary, it is apparent that a party is entitled
to the production and inspection of a document applicable to his case,
although the same document may likewise be evidence for the other
party’s case. But as a negative injunction, the remedy cannot be made
use of to secure documents entirely irrelevant to the issues of the
case, and cannot be provided in so loose a manner as to constitute an
omnibus order or a fishing expedition.

We are asked by the
respondents to sanction a rule which would allow the examining party
not only to secure facts connected with his own case, but also to
secure facts which of themselves are exclusively evidence of his
opponent’s case. We are cited to a proposed model procedure act
advocated by the American Judicature Society and to rules of courts
approved by certain states in the American union. Without expressing
any opinion on this subject, it suffices to say that if such an
innovation is deemed advisable, it should be the object of legislation.
Other jurisdictions, for instance California and the federal
government, have made provision for a remedy of inspection in the
nature of a bill of discovery, and the same opportunity is left open
for our Code Committee and the Philippine Legislature. For the present,
recognizing the place in our jurisprudence of a remedy akin to a bill
of discovery, and being fully cognizant of the benefits to be derived
from a conservative use of the remedy to clarify the issues before
trial, we have to circumscribe the scope of the remedy within proper
limits so as to make our rules agree with those generally accepted in
other jurisdictions and so as not to offend the constitutional
prohibition against unreasonable searches and seizures.

Only a few months ago, in the case of Sinclair Refining Company vs.
Jenkins Petroleum Process Company ([May 29, 1933], United States
Supreme Court Advance Opinions, p. 900), in speaking of a bill of
discovery, Justice Cardozo observed:

“Help
for the solution of problems of this order is not to be looked for in
restrictive formulas. Procedure must have the capacity of flexible
adjustment to changing groups of facts. The law of discovery has been
invested at times with unnecessary mystery. There are few fields where
considerations of practical convenience should play a larger role. The
rationale of the remedy, when used as an auxiliary process in aid of
trials at law, is simplicity itself. At times, cases will not be
proved, or will be proved clumsily or wastefully, if the litigant is
not permitted to gather his evidence in advance. When this necessity is
made out with reasonable certainty, a bill in equity is maintainable to
give him what he needs. Equity Rule 58. There were other reasons in
times past, when parties were not permitted to be witnesses, and when
there was no compulsory process for the production of books or
documents. (Carpenter vs. Winn, 221 U. S., 533; 55 L. ed., 842; 31 S. Ct., 683; Pressed Steel Car. Co. vs.
Union P. R. Co. [D. C.], 240 Fed., 135, 136.) Today the remedy
survives, chiefly, if not wholly, to give facility to proof. In the
practice of many states there is a summary substitute by an order for
examination before trial or for the inspection of books and papers. * *
*

* * * * * * *

“To hold
that the plaintiff in an action at law may have discovery of damages is
not to say that the remedy will be granted as of course, or that
protection will not be given to his adversary against impertinent
intrusion. Wigram, supra, sec. 115. The court may decline to
open the defendant’s records to the scrutiny of a competitor posing as
a suitor, if the suit has been begun without probable cause or as an
instrument of malice. It is all a matter of discretion. Good faith and
probable cause were here abundantly established. The remedy of specific
performance had been refused, but the very court that refused it had
found sufficient merit in the suit to call for an amendment of the
pleadings that would give the plaintiff an opportunity to maintain a
remedy at law.”

To consolidate our
discussion of the case, we agree that there is a remedy which may be
invoked by parties before trial to obtain evidence from records under
the control of their adversaries; that the materiality of the documents
and the specification of the same are important considerations; that
the test of reasonableness and practicability are to be applied, and
that a discretion is lodged in trial courts to determine these
questions. Here we have the finding, at least impliedly made by Judge
Diaz, that the documents described by the subpoena are
relevant to the case, and the finding by Judge Moran, expressly made,
that the said documents are material in order that there might be
demonstrated the alleged conspiracy by the defendants to defraud the
plaintiff; and it is apparent that it was just as essential for the
plaintiff to have knowledge of the records of the Lime Corporation of
the Philippines, showing the source and disposition of all transactions
of the corporation with the defendants, either in the nature of money
borrowed or credits extended or merchandise sold or delivered, which
was the purport of the challenged subpoena, as it was to
authorize the plaintiff to obtain the records of the corporation
showing the source and disposition of all moneys borrowed by the
corporation from the other defendants, which was the purport of the
first subpoena. Therefore, we are unable to say that a
showing of abuse of sound discretion on the part of the trial judges
has been demonstrated.

In consonance with the foregoing, the
petition will be denied, and the preliminary injunction dissolved, with
the costs to be paid by the petitioners.

Avanceña, C. J., Street, Villa-Real, Abad Santos, Hull, Vickers, Imperial, and Butte, JJ., concur.