PALLASIGUE, Mary Jobeth E.

Modes of Discovery
Case Digest

RULE 26 (ADMISSION BY ADVERSE PARTY)

Allied Agri-Business Development Co. Inc. vs. Court of Appeals

G.R. No. 118438, December 4, 1998

FACTS: Private respondent Cherry Valley Farms Limited, a foreign company based in England,
filed against petitioner Allied Agri-Business a complaint for collection of sum of money
alleging, among others that on 1 September 1982 up to 16 February 1983, or for a period of less
than six (6) months, petitioner purchased in ten (10) separate orders and received from
respondent several duck hatching eggs and ducklings which in value totaled English Sterling
Pounds 51,245.12, which the petitioner failed to pay despite repeated demands. And instead of
paying its obligation, ALLIED through its president wrote CHERRY VALLEY inviting the
latter to be a stockholder in a new corporation to be formed by ALLIED, which invitation
however was rejected by CHERRY VALLEY. Lastly, the ALLIED's president Ricardo Quintos
expressly acknowledged through a letter the obligation of his corporation to CHERRY.
Private Respondent: CHERRY VALLEY served on ALLIED’s counsel a Request for
Admission which states among others that Mr. Quintos, in his capacity as president of ALLIED,
sent a letter to CHERRY VALLEY proposing the setting up of a new corporation with CHERRY
VALLEY refusal; that Mr. Ricardo Quintos in a letter admitted ALLIED’s indebtedness.
Petitioner: ALLIED filed its Comments/Objections alleging that: (a) the admissions requested
were matters which the private respondent had the burden to prove through its own witness
during the trial and thus petitioner need not answer; and, (b) the request for admission regarding
the ownership set-up of petitioner corporation was immaterial and improper for not having been
pleaded in the complaint. CHERRY VALLEY maintained that there was no need on its part to
produce a witness to testify on the matters requested for admission, for these pertained to
incidents personal to and within the knowledge of petitioner alone.
RTC: The trial court issued an order disregarding ALLIEDs Comments/Objections to Request
for Admission in view of its non-compliance with Sec. 2, Rule 26, of the Rules of Court and
directing ALLIED to answer the request for admission within ten (10) days from receipt of the
order, otherwise, the matters contained in the request would be deemed admitted. ALLIED
moved to reconsider the order; however, the lower court denied ALLIEDs motion for
reconsideration and directed the latter to answer the request for admission within a non-
extendible period of five (5) days from receipt of the order. ALLIED failed to submit a sworn
answer to the request for admission within the additional period of five (5) days granted by the
trial court. Hence, CHERRY VALLEY filed a motion for summary judgment.
RTC: The trial court rendered judgment against petitioner, ordering defendant to pay plaintiff
the prayed amount or its peso equivalent at the time of payment plus legal interest from the date
of filing of this complaint until fully paid. The appellate court rendered a decision affirming the
summary judgment rendered by the trial court with the modification that ALLIED should pay the
monetary award to CHERRY VALLEY in Philippine currency and that the award of attorney’s
fees and costs of suit be deleted. Hence, the instant petition by ALLIED.
ISSUE: Whether the trial court committed an error in rendering the summary judgment.
RULING: NO. The petition must fail.
Legal capacity to sue: In fact, petitioner is estopped from challenging or questioning the
personality of a corporation after having acknowledged the same by entering into a contract with
it. The doctrine of lack of capacity to sue or failure of a foreign corporation to acquire a local
license was never intended to favor domestic corporations who enter into solitary transactions
with unwary foreign firms and then repudiate their obligations simply because the latter are not
licensed to do business in this country.
Failure to answer request for admission: The purpose of the rule governing requests for
admission of facts and genuineness of documents is to expedite trial and to relieve parties of the
costs of proving facts which will not be disputed on trial and the truth of which can be
ascertained by reasonable inquiry. Each of the matters of which an admission is requested shall
be deemed admitted unless within a period designated in the request which shall not be less than
fifteen (15) days after service thereof, or within such further time as the court may allow on
motion, the party to whom the request is directed files and serves upon the party requesting the
admission a sworn statement either denying specifically the matters of which an admission is
requested or setting forth in detail the reasons why he cannot truthfully either admit or deny
those matters. Petitioner failed to submit the required answer within the period.
The burden of affirmative action is on the party upon whom notice is served to avoid the
admission rather than upon the party seeking the admission. Hence, when petitioner failed to
reply to a request to admit, it may not argue that the adverse party has the burden of proving the
facts sought to be admitted. Petitioners silence is an admission of the facts stated in the request.
 RULE 29 (REFUSAL TO COMPLY WITH MODES OF DISCOVERY)

Felisa Jaravata vs. Maria Diana Karolus, Grace Kuhail

G.R. No. 154988, June 21, 2007

FACTS: The case stemmed from an action for reconveyance and declaration of nullity of titles
and damages filed by petitioner alleging that she is the lawful owner and actual occupant of a
parcel of land involved. In her complaint, it was narrated that as early as 1950, petitioner and her
predecessors-in-interest have been in actual, continuous, open, and public possession of Lots in
the concept of an owner. In addition to the uninterrupted physical possession, petitioner averred
that she had planted and cultivated the subject parcels of land and had declared the same for
taxation purposes. Sometime in 1992, petitioner discovered that her relatives, herein respondents,
fraudulently and illegally secured titles over Lots 1 and 2. Petitioner recounted that respondent
Karolus, through fraud and misrepresentation, was able to obtain approval, in her name, of Free
Patent and for which an OCT was issued by the Register of Deeds of Zambales involving an area
of 41,505 sq. m. It was further alleged that petitioner's Lot 1 overlapped with the property
registered in the name of respondent Karolus. Moreover, respondent Kuhail, also purportedly
through fraud and misrepresentation, was granted a Free Patent for which an OCT was issued.
The property, with an area of 33,476 sq. m., is supposedly identical to or overlaps with Lot 2 of
the petitioner.

Petitioner: Furthermore, petitioner asseverated that the free patents issued to respondents should
be declared null and void ab initio on the grounds that respondents or any of their alleged
predecessors-in-interest have never been in possession of the contested lots; that the titles to both
lots were secured through fraud and misrepresentation; and that respondents were never qualified
to be grantees of free patents in 1988 on account of their age and citizenship. Lastly, petitioner
insisted that the disputed lots ceased to be part of the public domain and beyond the authority of
the Director of Lands and the Department of Environment and Natural Resources to dispose of
or award as free patents to third parties, because she became its owner, ipso facto and by
operation of law, on account of her open and continuous possession and cultivation for more than
30 years, her payment of taxes thereon, and her exercise of all attributes of ownership.

Respondent: As affirmative and special defenses, respondents argued that petitioner's action for
reconveyance had already prescribed since it was admitted in her complaint that she came to
know of the existence of the titles in the early part of 1992. Accordingly, the four-year
prescriptive period from the discovery of fraud had already prescribed. On the declaration of
nullity of the Torrens titles, respondents averred that petitioner had no cause of action because
the matter may only be raised by the government. As compulsory counterclaims, respondents
alleged that sometime in August 1995, petitioner, through stealth and strategy, forcibly entered
the areas covered by the Torrens titles of respondents, ousting the latter from their lawful
possession and despite demands, refused to vacate the said area.
Modes of Discovery: Petitioner served upon the respondents and their counsel two separate and
different sets of written interrogatories. Respondents filed their objection to the written
interrogatories. The RTC denied the objections interposed by the respondents and allowed
petitioner's written interrogatories. Respondents filed a manifestation and compliance attaching
their answers thereto to the written interrogatories. Petitioner filed an omnibus motion primarily
to compel the respondents to fully and completely answer their written interrogatories.

RTC: The RTC declared respondents in default for their failure to fully answer the written
interrogatories in the principal action. The trial court renders judgment by default in favor of
plaintiff. Aggrieved, respondents filed a notice of appeal before the CA. Disposing of the appeal,
the CA ruled thereon and reversed the decision of the RTC. Hence, this petition.

Petitioner's Arguments: Petitioner argues that there was no trial on the merits and presentation
of any evidence before the court a quo and, therefore, the CA could not validly dismiss the case.
She adds that the CA's jurisdiction was merely limited to reviewing whether or not the default
judgment of the RTC was in accordance with Rule 29 of the Rules of Court.

ISSUE: Whether or not the appellate court was correct in granting the respondents' appeal and in
dismissing the complaint before the court a quo.

RULING: YES. The petition has merit. The CA rightly held that the court a quo erred in
rendering a judgment by default against the defendants for refusal or failure to answer written
interrogatories, without first requiring an application by the proponent to compel an answer.

Nevertheless, the Court of Appeals erred in proceeding to decide the case on the merits since
there was as yet no trial or presentation of evidence in the court a quo. Petitioner's prayer to
affirm the trial court's default decision does not mean that there was a trial. The decision of the
trial court was based on constructive admissions by the defendants of the allegations of the
plaintiff due to the court's application of the sanction for not answering the written
interrogatories.

In reversing the application of the sanction, the CA should have given the parties a chance to
substantiate by evidence their respective claims at the trial court. This is particularly true with
respect to the plaintiff's claim of physical possession for more than 30 years, regarding which the
CA said that clear and convincing evidence was required but wanting. This is because the wrong
procedure followed by the trial court effectively aborted a trial and presentation of evidence.