Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 146611

February 6, 2007

TANCREDO REDEA, Petitioner,

vs.
HON. COURT OF APPEALS and LEOCADIO REDEA, Respondents.
DECISION
GARCIA, J.:
In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner
Tancredo Redea (Tancredo, hereafter) seeks the annulment and setting aside of the
Resolution1 dated April 28, 2000 of the Court of Appeals in CA-G.R. CV No. 59641, as reiterated in
its Resolution2 of November 16, 2000, denying the petitioners motion for reconsideration.
The present controversy sprung from an action for partition filed by petitioner Tancredo against his
older half-brother, herein private respondent Leocadio Redea (Leocadio, for brevity) before the then
Court of First Instance (now Regional Trial Court [RTC]) of San Pablo City, Laguna, and thereat
docketed as Civil Case No. S-241 which was subsequently inherited by Branch 33 of the RTC,
Siniloan, Laguna.
The basic complaint for partition alleges that plaintiff Tancredo and defendant Leocadio are both
sons of one Maximo Redea: Tancredo, by Maximos marriage to Magdalena Fernandez, and
Leocadio, by Maximos previous marriage to Emerenciana Redea. The complaint further alleged
that the parties common father, Maximo, left several pieces of realty, to wit: a residential lot at M.
Calim Street, Famy, Laguna; a riceland at Poroza, Famy, Laguna; and another parcel of land at
Maate, also in Famy, Laguna.
In a decision3 dated August 20, 1997, the trial court, based on the evidence presented, confined the
partition to only the property actually pertaining to the estate of the parties deceased father and coowned by them, namely, the parcel of land at Maate, and accordingly rendered judgment as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering the defendant [now
respondent Leocadio] to partition only the property located at Maate, Famy, Laguna after plaintiffs
[Tancredos] reimbursement of the expenses incurred by the defendant in relation to the said lot.
However, partition cannot be effected with regard to properties located at M. Calim Street, Famy,
Laguna and the property located at Poroza, Famy, Laguna, as the same belong to the defendant. No
pronouncement as to costs.
SO ORDERED. (Words in brackets supplied)

On December 11, 1997, petitioner filed with the trial court a Notice of Appeal. 4 The court gave due
course to the notice and directed the elevation of the records of the case to the CA whereat
petitioners appeal was docketed as CA-G.R.CV No. 59641.
On September 28, 1998, the CA issued a resolution directing petitioner, as appellant, to file his
appellants brief. Evidently, the period for filing the brief was even extended by the CA.
On March 9, 1999, there being no appellants brief filed within the extended period, the CA issued a
resolution5considering the appeal abandoned and accordingly dismissing the same. The dismissal
resolution reads:
For failure of plaintiff-appellant [now petitioner] to file the required brief within the extended period,
the instant appeal is hereby considered ABANDONED and accordingly DISMISSED, pursuant to
Section 1(e), Rule 50, 1997 Rules of Civil Procedure.
On November 8, 1999 or eight (8) months after the CA issued the above resolution, petitioner filed a
motion for reconsideration6 thereof. In a resolution7 of November 25, 1999, the CA denied the
motion.
Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed a Petition for
Relief8 bearing date December 27, 1999, anchored on Section 2,9 Rule 38 of the 1997 Rules of Civil
Procedure. In that pleading, petitioner prays the CA to set aside its dismissal resolution of March 9,
1999, supra, reinstate his appeal and grant him a fresh period of forty-five (45) days from notice
within which to file his appellants brief.
In the herein assailed Resolution10 dated April 28, 2000, the CA denied the aforementioned Petition
for Relief, thus:
WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED.
SO ORDERED.
Explains the CA in said resolution:
Petition for relief is not among the remedies available in the Court of Appeals. In fact, authorities in
remedial law (noted authors Regalado, Herrera, and Feria) are one in their commentaries that these
petitions are filed with the trial courts. Not one of them has advanced an opinion or comment that
this equitable relief can be obtained in the Court of Appeals. Under Rule 47, an annulment of
judgment or final orders and resolutions may be filed before this court based on the ground of
extrinsic fraud which seems to be the premise of the petition. Perhaps it is worth looking into by the
petitioner if the factual basis of the present petition for relief may qualify as an extrinsic fraud, under
Rule 47.
Petitioners motion for reconsideration of the above-mentioned resolution was likewise denied by the
CA in its equally challenged Resolution11 of November 16, 2000, wherein the appellate court further
wrote:

Under the 1964 Rules of Court, there was only one court where a petition for relief may be filed the
Court of First Instance, now the Regional Trial Court. Section 1 thereof governs a petition to Court of
First Instance for relief from judgment of inferior court while Section 2 thereof governs petition to
Court of First Instance for relief from judgment or other proceeding thereof. The 1997 Rules of Civil
Procedure has altered the said precept. Now, it must be filed before the Municipal Trial Courts or
Metropolitan Trial Courts for judgments or final orders or other proceedings taken in said courts, and
in the same case. And for judgment, order, or other proceedings in the Regional Trial Court, it must
be filed in the same Regional Trial Court which rendered the judgment or final order, or other
proceedings taken and in the same case. In other words, under the present rule, such a petition may
be filed in the same court which rendered the judgment or final order, or proceedings taken and in
the same case. This is in accordance with uniform procedure rule for Municipal and Regional Trial
Courts.
The above construction to limit the term "any court" to Municipal Trial Court and Regional Trial Court
and not to include the Court of Appeals finds support in Section 7 of the Rules which states:
Sec. 7. Procedure where the denial of an appeal is set aside. Where the denial of an appeal is set
aside, the lower court shall be required to give due course to the appeal and to elevate the record of
the appealed case as if a timely and proper appeal had been made.
Significantly, there is no specific provision in both the 1964 and 1997 Rules of Court making the
petition under Rule 38, applicable in the Court of Appeals. The procedure in the Court of Appeals
from Rule 44 to Rule 55 with the exception of Rule 45 which pertains to the Supreme Court,
identifies the remedies available before said court such as annulment of judgment or final orders and
resolution (Rule 47); motion for reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere is
petition for relief under Rule 38 mentioned.
But even as the CA stood firm on its stand that a petition for relief from denial of appeal is not among
the remedies available before the CA itself, the appellate court, in the same Resolution of November
16, 2000, left the final determination of the question to this Court, thus:
Parenthetically, the main question presented herein is novel in that there is yet no definite and
definitive jurisprudence from the Supreme Court. Perhaps, the case will clarify this gray area in our
adjective law for guidance of the Bench and Bar. The issue should be elevated to that Tribunal.
Presently, petitioner is now before this Court via the instant recourse on his submission that the CA
committed grave abuse of discretion when it I
XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN THE COURT OF
APPEALS.
II
XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT (A)
PETITIONER, BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED FROM
PROSECUTING HIS APPEAL, AND (B) PETITIONER HAS A GOOD AND SUBSTANTIAL CAUSE
OF ACTION AGAINST PRIVATE RESPONDENT.

We DISMISS.
In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No. 137621,
February 6, 2002, then Associate Justice, now Chief Justice Reynato S. Puno, reminded us that
Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar as their provisions
are unambiguous, are rigorously applied to resolve legal issues on the merits. In contrast, courts
generally frown upon an uncompromising application of procedural laws so as not to subvert
substantial justice. Nonetheless, it is not totally uncommon for courts to decide cases based on a
rigid application of the so-called technical rules of procedure as these rules exist for the orderly
administration of justice.
From the petition, it is clear that this Court is called upon to relax the application of procedural rules,
or suspend them altogether, in favor of petitioners substantial rights. There is no doubt as to the
power of this Court to do that. In a fairly recent case, we reiterated:
The Court has often stressed that rules of procedure are merely tools designed to facilitate the
attainment of justice. They were conceived and promulgated to effectively aid the court in the
dispensation of justice. Courts are not slaves to or robots of technical rules, shorn of judicial
discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided
by the norm that on the balance, technicalities take a backseat against substantive rights, and not
the other way around. Thus, if the application of the Rules would tend to frustrate rather than
promote justice, it is always within our power to suspend the rules or except a particular case from
its operation.12
The Rules itself expressly states in Section 2 of Rule 1 that the rules shall be liberally construed in
order to promote their object and to assist the parties in obtaining just, speedy and inexpensive
determination of every action and proceeding. Courts, therefore, not only have the power but the
duty to construe and apply technical rules liberally in favor of substantive law and substantial justice.
Furthermore, this Court, unlike courts below, has the power not only to liberally construe the rules,
but also to suspend them, in favor of substantive law or substantial rights. Such power inherently
belongs to this Court, which is expressly vested with rule-making power by no less than the
Constitution.13
1awphi1.net

It is equally settled, however, that this Courts power to liberally construe and even to suspend the
rules, presupposes the existence of substantial rights in favor of which, the strict application of
technical rules must concede. The facts are borne out by the records pertaining to petitioners
purported undivided share in the property at M. Calim Street, Famy, Laguna, and the property in
Poroza clearly showed that these two properties had been subject of an agreement (Exh. "1")
whereby petitioner recognized respondents rights to said properties. This fact binds this Court, there
being nothing on record with the trial court as to the herein alleged fraud against the petitioner. Upon
thorough deliberation of the supposed substantial rights claimed by the petitioner with the court
below, the Court finds no cogent basis to favorably rule on the merits of the appeal even if it may be
given due course which is indispensable to justify this Court in considering this case as an exception
to the rules.
The present case will have to be decided in accordance with existing rules of procedure. We apply
the settled principle that petition for relief under Rule 38 of the Rules of Court is of equitable
character, allowed only in exceptional cases as when there is no other available or adequate

remedy.14 Hence, a petition for relief may not be availed of where a party has another adequate
remedy available to him, which is either a motion for new trial or appeal from the adverse decision of
the lower court, and he is not prevented from filing such motion or taking the appeal. The rule is that
relief will not be granted to a party who seeks to be relieved from the effect of the judgment when the
loss of the remedy at law is due to his own negligence, or a mistaken mode of procedure; otherwise,
the petition for relief will be tantamount to reviving the right of appeal which has already been lost
either because of inexcusable negligence or due to a mistake in the mode of procedure taken by
counsel.15
Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from taking an appeal
from a judgment or final order of a court by reason of fraud, accident, mistake or excusable
negligence, may file in the same court and in the same case a petition for relief praying that his
appeal be given due course. This presupposes, of course, that no appeal was taken precisely
because of any of the aforestated reasons which prevented him from appealing his case. Hence, a
petition for relief under Rule 38 cannot be availed of in the CA, the latter being a court of appellate
jurisdiction. For sure, under the present Rules, petitions for relief from a judgment, final order or
other proceeding rendered or taken should be filed in and resolved by the court in the same case
from which the petition arose. Thus, petition for relief from a judgment, final order or proceeding
involved in a case tried by a municipal trial court shall be filed in and decided by the same court in
the same case, just like the procedure followed in the present Regional Trial Court. 16
Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial court, which the
latter granted in its order of December 11, 1997 and ordered the elevation of the records to the CA.
In turn, the CA, in its resolution of September 28, 1998, required the petitioner, thru his former
counsel, Atty. Geminiano Almeda, to file his appellants brief. But petitioner failed to comply.
Consequently, in its resolution of March 9, 1999, the CA considered the appellants appeal as
ABANDONED and DISMISSED the same.
Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for reconsideration
of the dismissal resolution. Unfortunately, however, the motion was filed very much late on
November 8, 1999. Expectedly, in its resolution17 of November 25, 1999, the CA denied the motion
for reconsideration, to wit:
The last day to file a motion for reconsideration was on 06 April 1999 and as of 18 October 1999 no
such motion was ever filed; in fact on 19 October 1999 the court resolved that an entry of judgment
may now be issued. The motion for reconsideration, however, pleas for leniency on account of his
former lawyers inefficiency and negligence in that he failed to appeal the case. This is not well
taken.
His former lawyers lack of fidelity and devotion to his client in the discharge of his duty of perfecting
the appeal on time without demonstrating fraud, accident, mistake or excusable negligence cannot
be a basis for judicial relief. The client has to bear the adverse consequences of the inexcusable
mistake or negligence of his counsel or of the latters employee and may not be heard to complain
that the result of the litigation might have been different had he proceeded differently (Inocando v.
Inocando, 100 Phil. 266)
WHEREFORE, the motion is hereby DENIED.

Petitioner presents himself as a mere farmer seeking the Courts leniency to the point of
disregarding the rules on reglementary period for filing pleadings. But he fails to point out any
circumstance which might lead the Court to conclude that his station in life had in any way placed his
half-brother in a more advantageous position. As we see it, petitioner failed to show diligence in
pursuing his cause. His condition as a farmer, by itself alone, does not excuse or exempt him from
being vigilant on his right. He cannot lay the blame solely on his former lawyer. It is settled that
clients are bound by the mistakes, negligence and omission of their counsel. 18 While, exceptionally, a
client may be excused from the failure of his counsel, the circumstances obtaining in this case do not
convince the Court to take exception.
In seeking exemption from the above rule, petitioner claims that he will suffer deprivation of property
without due process of law on account of the gross negligence of his previous counsel. To him, the
negligence of his former counsel was so gross that it practically resulted to fraud because he was
allegedly placed under the impression that the counsel had prepared and filed his appellants brief.
He thus prays the Court reverse the CA and remand the main case to the court of origin for new trial.
Admittedly, this Court has relaxed the rule on the binding effect of counsels negligence and allowed
a litigant another chance to present his case (1) where the reckless or gross negligence of counsel
deprives the client of due process of law; (2) when application of the rule will result in outright
deprivation of the clients liberty or property; or (3) where the interests of justice so require. 19 None of
these exceptions obtains here.
For a claim of counsels gross negligence to prosper, nothing short of clear abandonment of the
clients cause must be shown. Here, petitioners counsel failed to file the appellants brief. While this
omission can plausibly qualify as simple negligence, it does not amount to gross negligence to justify
the annulment of the proceedings below.
In Legarda v. Court of Appeals,20 where the Court initially held that the counsels failure to file
pleadings at the trial court and later on appeal amounted to gross negligence, the Court, on motion
of the respondent therein, granted reconsideration and applied the general rule binding the litigant to
her counsels negligence. In said case, the Court noted that the proceedings which led to the filing of
the petition "were not attended by any irregularity." The same observation squarely applies here.
To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules of Court. He
was not prevented from filing his notice of appeal by fraud, accident, mistake or excusable
negligence, as in fact he filed one. The relief afforded by Rule 38 will not be granted to a party who
seeks to be relieved from the effects of the judgment when the loss of the remedy of law was due to
his own negligence, or a mistaken mode of procedure for that matter; otherwise, the petition for relief
will be tantamount to reviving the right of appeal which has already been lost, either because of
inexcusable negligence or due to a mistake of procedure by counsel. 21 The Rules allow a petition for
relief only when there is no other available remedy, and not when litigants, like the petitioner, lose a
remedy by negligence.
On a final note, the extraordinary writ of certiorari may be issued only where it is clearly shown that
there is patent and gross abuse of discretion as to amount to an evasion of positive duty or to virtual
refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power
is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.22 The
Court finds no such abuse of discretion in this case.

WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the CA are
AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice

G.R. No. 204700

April 10, 2013

EAGLERIDGE DEVELOPMENT CORPORATION, MARCELO N. NAVAL and CRISPIN I.

OBEN, Petitioners,
vs.
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC. Respondent.
DECISION
LEONEN, J.:
All documents mentioned in a Deed of Assignment transferring the credit of the plaintiff in a pending
litigation should be accessible to the defendant through a Motion for Production or Inspection of
Documents under Rule 27 o(the Rules of Court. Litigation is not a game of skills and stratagems. It is
a social process that should allow both parties to fully and fairly access the truth of the matters in
litigation.
Before this Court is a Petition under Rule 45, seeking to review the August 29, 2012 1 and November
27, 20122Resolutions of the Third Division of the Court of Appeals. The Resolutions dismissed
petitioners' Rule 65 Petition and affirmed the Resolutions dated March 28, 2012 3 and May 28,
20124 of the Regional Trial Court, Branch 60, Makati City denying petitioners' motion for
production/inspection.
The pertinent facts are as follows:5
Petitioners Eagleridge Development Corporation (EDC), and sureties Marcelo N. Naval (Naval) and
Crispin I. Oben (Oben) are the defendants in a collection suit initiated by Export and Industry Bank
(EIB) through a Complaint6dated February 9, 2005, and currently pending proceedings before the
Regional Trial Court (RTC), Branch 60, Makati City7.
By virtue of a Deed of Assignment8 dated August 9, 2006, EIB transferred EDC's outstanding loan
obligations ofP10,232,998.00 to respondent Cameron Granville 3 Asset Management, Inc.
(Cameron), a special purpose vehicle, thus:

For value received and pursuant to the (a) Loan Sale and Purchase Agreement dated as of 7 April
2006 (the "LSPA"), made and executed by Export and Industry Bank, as Seller ("Seller"), and by
Cameron Granville Asset Management (SPV-AMC), Inc. (the "Purchaser"), and (b) the Deed of
Absolute Sale dated 9 August 2006 (the "Deed") made and executed by and between Seller and
Purchaser, Seller hereby absolutely sells, assigns and conveys to Purchaser, on a "without
recourse" basis, all of its rights, title and interests in the following Loan:
EAGLERIDGE DEVELOPMENT CORPORATION with an outstanding loan obligation of Php
10,232,998.00 covered by an unregistered Deed of Assignment of Receivables.
xxx xxx xxx
Defined terms used but not otherwise defined herein have the meaning given to them in the LSPA. 9
Thereafter, Cameron filed its Motion to Substitute/Join EIB dated November 24, 2006, which was
granted by the trial court.
On February 22, 2012, petitioners filed a Motion for Production/Inspection 10 of the Loan Sale and
Purchase Agreement (LSPA) dated April 7, 2006 referred to in the Deed of Assignment.
Respondent Cameron filed its Comment11 dated March 14, 2012 alleging that petitioners have not
shown "good cause" for the production of the LSPA and that the same is allegedly irrelevant to the
case a quo.
In response, petitioners filed on March 26, 2012 their Reply.12 Petitioners explained that the
production of the LSPA was for "good cause". They pointed out that the claim of Cameron is based
on an obligation purchased after litigation had already been instituted in relation to it. They claimed
that pursuant to Article 1634 of the New Civil Code13 on assignment of credit, the obligation subject
of the case a quo is a credit in litigation, which may be extinguished by reimbursing the assignee of
the price paid therefor, the judicial costs incurred and the interest of the price from the day on which
the same was paid. Article 1634 provides:
When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to extinguish
it by reimbursing the assignee for the price the latter paid therefor, the judicial costs incurred by him,
and the interest on the price from the day on which the same was paid.
As petitioners' alleged loan obligations may be reimbursed up to the extent of the amount paid by
Cameron in the acquisition thereof, it becomes necessary to verify the amount of the consideration
from the LSPA, considering that the Deed of Assignment was silent on this matter.
In its Resolution14 dated March 28, 2012, the trial court denied petitioners' motion for production for
being utterly devoid of merit. It ruled that there was failure to show "good cause" for the production of
the LSPA and failure to show that the LSPA is material or contains evidence relevant to an issue
involved in the action.
Aggrieved, petitioners filed on April 25, 2012, their Motion for Reconsideration. 15 They argued that
the application of Article 1634 of the Civil Code is sanctioned by Section 12, Article III of Republic Act
No. 9182, otherwise known as the Special Purpose Vehicle Law (SPV Law). Section 12 provides:

SECTION 12. Notice and Manner of Transfer of Assets. (a) No transfer of NPLs to an SPV shall
take effect unless the FI concerned shall give prior notice, pursuant to the Rules of Court, thereof to
the borrowers of the NPLs and all persons holding prior encumbrances upon the assets mortgaged
or pledged. Such notice shall be in writing to the borrower by registered mail at their last known
address on file with the FI. The borrower and the FI shall be given a period of at most ninety (90)
days upon receipt of notice, pursuant to the Rules of Court, to restructure or renegotiate the loan
under such terms and conditions as may be agreed upon by the borrower and the FIs concerned.
(b) The transfer of NPAs from an FI to an SPV shall be subject to prior certification of eligibility as
NPA by the appropriate regulatory authority having jurisdiction over its operations which shall issue
its ruling within forty-five (45) days from the date of application by the FI for eligibility.
(c) After the sale or transfer of the NPLs, the transferring FI shall inform the borrower in writing at the
last known address of the fact of the sale or transfer of the NPLs.
They alleged that the production of the LSPA which would inform them of the consideration for the
assignment of their loan obligation is relevant to the disposition of the case.
Respondent Cameron filed its Comment/Opposition16 dated April 30, 2012 reiterating that the
production of the LSPA was immaterial, to which, petitioners filed, on May 14, 2012, their
Reply.17 Petitioners insisted the materiality of inquiring about the contents of the LSPA, as the
consideration for any transfer of the loan obligation of petitioner EDC should be the basis for the
claim against them.
The trial court denied petitioners' motion for reconsideration in its Resolution dated May 28, 2012.
On July 27, 2012, petitioners filed their Petition for Certiorari with the Court of Appeals (CA), to nullify
and/or set aside the RTC's Resolutions dated March 28, 2012 and May 28, 2012.
In its Resolution dated August 29, 2012, the CA (Third Division) dismissed the petition for lack of
petitioner Oben's verification and certification against forum shopping and failure to attach a copy of
the complaint.
Petitioners' subsequent motion for reconsideration18 dated September 20, 2012, was likewise denied
in the CA's November 27, 2012 Resolution.
Hence this instant petition.
The resolution of this case revolves around the following issues: (1) whether the CA erred in
dismissing the petition on technicality, i.e. on a defective verification and certification against forum
shopping and the attachment to the petition of a mere machine copy of the complaint; and (2)
whether the RTC gravely abused its discretion in denying the production and/or inspection of the
LSPA.
We agree with petitioner, that the appellate court erred in ruling that Oben's Verification and
Certification was defective for lack of a Board Resolution authorizing Oben to sign on behalf of
petitioner EDC. Oben executed and signed the Verification and Certification in his personal capacity
as an impleaded party in the case, and not as a representative of EDC. We note that an earlier

Verification and Certification signed by Naval, for himself and as a representative of EDC, and a
Secretary Certificate containing his authority to sign on behalf of EDC, were already filed with the
appellate court together with the petition for certiorari.19 As such, what was only lacking was Oben's
Verification and Certification as pointed out in the August 29, 2012 Resolution of the CA.
On the other hand, contrary to petitioners' assertion, a reading of the CA Resolution dated November
27, 2012 shows that the appellate court merely noted the belated attachment of a machine copy, not
a certified true copy, of the complaint to petitioners' motion for reconsideration. Although not
expressly stated, the machine copy of the complaint is in fact acceptable, as Rule 65 provides that
one may attach to the petition mere machine copies of other relevant documents and
pleadings.20 More importantly, the CA's dismissal of the petition for certiorari was anchored on its
finding that there was no grave abuse of discretion on the part of the RTC in denying the production
of the LSPA, that the errors committed by Judge Ruiz were, if at all, mere errors of judgment
correctible not by the extraordinary writ of certiorari and an ordinary appeal would still be available in
the action below for sum of money.21
An appeal would not have adequately remedied the situation because, in that case, the court would
have rendered its decision without giving the petitioners the opportunity to make use of the
information that the LSPA would have supplied as a result of the court allowing the production of the
LSPA. If, on appeal, public respondent reversed its decision, the reversal would result in the case
being retried in the lower court, which would unnecessarily delay the resolution of the case and
burden the parties with additional litigation expense.
Having resolved the issue on the supposed technical defects, we go on to discuss the second issue.
Section 1, Rule 27 of the 1997 Rules of Court, states:
Section 1. Motion for production or inspection; order. Upon motion of any party showing good
cause therefor, the court in which an action is pending may a) order any party to produce and permit
the inspection and copying or photographing, by or on behalf of the moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged,
which constitute or contain evidence material to any matter involved in the action and which are in
his possession, custody or control; xxx
The provision on production and inspection of documents is one of the modes of discovery
sanctioned by the Rules of Court in order to enable not only the parties, but also the court to
discover all the relevant and material facts in connection with the case pending before it. 22
Generally, the scope of discovery is to be liberally construed so as to provide the litigants with
information essential to the fair and amicable settlement or expeditious trial of the case. 23 All the
parties are required to lay their cards on the table so that justice can be rendered on the merits of
the case.24
Although the grant of a motion for production of document is admittedly discretionary on the part of
the trial court judge, nevertheless, it cannot be arbitrarily or unreasonably denied because to do so
would bar access to relevant evidence that may be used by a party-litigant and hence, impair his
fundamental right to due process.25

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.26
According to the trial court, there is no need for the production of the LSPA in order to apprise the
petitioners of the amount of consideration paid by respondent in favor of EIB and that it is enough
that the Deed of Assignment has been produced by Cameron showing that it has acquired the
account of the petitioners pursuant to the SPV Law.27
We find the Petition impressed with merit.
The question was whether respondent had acquired a valid title to the credit, i.e., EDCs outstanding
loan obligation, and whether it had a right to claim from petitioners. In fact, petitioners had
maintained in their motions before the trial court the nullity or non-existence of the assignment of
credit purportedly made between respondent and EIB (the original creditor).
As respondent Camerons claim against the petitioners relies entirely on the validity of the Deed of
Assignment, it is incumbent upon respondent Cameron to allow petitioners to inspect all documents
relevant to the Deed, especially those documents which, by express terms, were referred to and
identified in the Deed itself. The LSPA, which pertains to the same subject matter the transfer of
the credit to respondent is manifestly useful to petitioners defense.
Furthermore, under Section 17, Rule 132 of the 1997 Rules of Court, when part of a writing or record
is given in evidence by one party, the whole of the same subject may be inquired into by the other,
and when a detached writing or record is given in evidence, any other writing or record necessary to
its understanding may also be given in evidence. Since the Deed of Assignment was produced in
court by respondent and marked as one of its documentary exhibits, the LSPA which was made a
part thereof by explicit reference and which is necessary for its understanding may also be inevitably
inquired into by petitioners.
In this light, the relevance of the LSPA sought by petitioners is readily apparent. Fair play demands
that petitioners must be given the chance to examine the LSPA. Besides, we find no great practical
difficulty, and respondent did not allege any, in presenting the document for inspection and copying
of the petitioners.
Incidentally, the legal incidents of the case a quo necessitates the production of said LSPA.
Section 13 of the SPV Law clearly provides that "in the transfer of the Non-Performing Loans
(NPLs), the provisions on subrogation and assignment of credits under the New Civil Code shall
apply." The law does not exclude the application of Article 1634 of the New Civil Code to transfers of
NPLs by a financial institution to a special purpose vehicle. Settled is the rule in statutory
construction that "when the law is clear, the function of the courts is simple application." Besides, it is
within the power of an SPV to restructure, condone, and enter into other forms of debt settlement
involving NPLs.
Also, Section 19 of the SPV Law expressly states that redemption periods allowed to borrowers
under the banking law, the rules of court and/or other laws are applicable. Hence, the equitable right
of redemption allowed to a debtor under Article 1634 of the Civil Code is applicable.

Therefore, as petitioners correctly pointed out, they have the right of legal redemption by paying
Cameron the transfer price plus the cost of money up to the time of redemption and the judicial
costs.
Certainly, it is necessary for the petitioners to be informed of the actual consideration paid by the
SPV in its acquisition of the loan, because it would be the starting point for them to negotiate for the
extinguishment of their obligation. As pointed out by the petitioners, since the Deed of
Assignment merely states "For value received", the appropriate information may be supplied by the
LSPA. It is self-evident that in order to be able to intelligently match the price paid by respondent for
the acquisition of the loan, petitioner must be provided with the necessary information to enable it to
make a reasonably informed proposal. Because of the virtual refusal and denial of the production of
the LSPA, petitioners were never accorded the chance to reimburse respondent of the consideration
the latter has paid.
Consequently, this Court finds and so holds that the denial of the Motion for Production despite the
existence of "good cause," relevancy and materiality for the production of the LSPA was
unreasonable and arbitrary constituting grave abuse of discretion on the part of the trial court.
Hence, certiorari properly lies as a remedy in the present case.
Discretionary acts will be reviewed where the lower court or tribunal has acted without or in excess
of its jurisdiction, where an interlocutory order does not conform to the essential requirements of law
and may reasonably cause material injury throughout subsequent proceedings for which the remedy
of appeal will be inadequate, or where there is a clear or serious abuse of discretion. 28 The exercise
of discretion pertaining to discovery will be set aside where there is abuse, or the trial courts
disposition of matters of discovery was improvident and affected adversely the substantial rights of a
party.29 After all, the discretion conferred upon trial courts is a sound discretion which should be
exercised with due regard to the rights of the parties and the demands of equity and justice. 30
Indeed, the insistent refusal of respondent to produce the LSPA is perplexing and unacceptable to
this Court. Respondent even asserts that if petitioner EDC thinks that the LSPA will bolster its
defense, then it should secure a copy of the document from the Bangko Sentral ng Pilipinas and not
from respondent, because allegedly the document was not marked by respondent as one of its
exhibits.31
In light of the general philosophy of full discovery of relevant facts, the unreceptive and negative
attitude by the respondent is abominable. The rules on discovery are accorded broad and liberal
interpretation precisely to enable the parties to obtain the fullest possible knowledge of the issues
and facts, including those known only to their adversaries, in order that trials may not be carried on
in the dark.32
Undoubtedly, the trial court had effectively placed petitioners at a great disadvantage inasmuch as
respondent effectively suppressed relevant documents related to the transaction involved in the case
a quo. Furthermore, the remedies of discovery encouraged and provided for under the Rules of
Court to be able to compel the production of relevant documents had been put to naught by the
arbitrary act of the trial court.
It must be remembered that "litigation is essentially an abiding quest for truth undertaken not by the
judge alone, but jointly with the parties. Litigants, therefore, must welcome every opportunity to

achieve this goal; they must act in good faith to reveal documents, papers and other pieces of
evidence material to the controversy."33 Courts, as arbiters and guardians of truth and justice, must
not countenance any technical ploy to the detriment of an expeditious settlement of the case or to a
fair, full and complete determination on its merits.
WHEREFORE, the instant petition is GRANTED. The August 29, 2012 and November 27, 2012
resolutions of the Court of Appeals are REVERSED and SET ASIDE, and respondents are
ORDERED to produce the Loan Sale and Purchase Agreement dated April 7, 2006, including its
annexes and/or attachments, if any, in order that petitioners may inspect and/or photocopy the
same.
SO ORDERED.
MARVIC MARIO VICTOR F. LEONEN
Associate Justice