1. Alvarez vs.

Ramirez ESTRANGED WIFE

Facts:
Respondent Susan Ramirez was the complaining witness in a criminal case or arson pending before the RTC. The
accused was petitioner Maximo Alvarez, stranged husband of Esperanza Alvarez, sister of respondent. On June 21,
1999, Esperanza Alvarez was called to the witness stand as the first witness against petitioner, her husband.
Petitioner filed a motion to disqualify Esperanza from testifying against him pursuant to Rule 130 of the Revised
Rules of Court on marital disqualification.

Respondent filed an opposition to the motion. Pending resolution of the motion, the trial court directed the
prosecution to proceed with the presentation of the other witnesses. On September 2, 1999, the trial court issued the
questioned Order disqualifying Esperanza Alvarez from further testifying and deleting her testimony from the
records. The prosecution filed a motion for reconsideration but was denied in the other assailed Order dated October
19, 1999. This prompted respondent to file with the Court of Appeals a petition for certiorari with application for
preliminary injunction and temporary restraining order. On May 31, 2000, the Appellate Court rendered a Decision
nullifying and setting aside the assailed Orders issued by the trial court. Hence, this petition for review on certiorari.

Issue:
Whether or not Esperanza can testify over the objection of her estranged husband on the ground of marital privilege.

Ruling:

Yes, Esperanza may testify over the objection of her husband. Section 22, Rule 130 of the Revised Rules of Court
provides: "Sec. 22. Disqualification by reason of marriage. — During their marriage, neither the husband nor the
wife may testify for or against the other without the consent of the affected spouse , except in a civil case by one
against the other, or in a criminal case for a crime committed by one against the other or the latter's direct
descendants or ascendants." The reasons given for the rule are: 1. There is identity of interests between husband and
wife; 2. If one were to testify for or against the other, there is consequent danger of perjury; 3. The policy of the law
is to guard the security and confidences of private life, even at the risk of an occasional failure of justice, and to
prevent domestic disunion and unhappiness; and 4. Where there is want of domestic tranquility there is danger of
punishing one spouse through the hostile testimony of the other. The Supreme Court has held that in such a case,
identity is non-existent. In such a situation, the security and confidences of private life which the law aims to protect
are nothing but ideals which through their absence, merely leave a void in the unhappy home. (People v. Castañeda,
271 SCRA 504). Thus, there is no longer any reason to apply the Marital Disqualification Rule. It should be stressed
that as shown by the records, prior to the commission of the offense, the relationship between petitioner and his wife
was already strained. In fact, they were separated de facto almost six months before the incident. Indeed, the
evidence and facts presented reveal that the preservation of the marriage between petitioner and Esperanza is no
longer an interest the State aims to protect. On the other hand, the State has an interest in punishing the guilty and
exonerating the innocent, and must have the right to offer the testimony of Esperanza over the objection of her
husband.

2. People v. Pasensoy, G.R. No. 140634, NO OBJECTION MADE

FACTS:

This is a murder case against Roberto Pasensoy for killing Hilario Inovero. Roberto Pasensoy is the legal husband of
Analie Pasensoy. Analie has been in a live in relationship with a guy named Hilario Reyes y Inovero for 3 months
before the incident happened. Roberto Pasensoy has no knowledge of the affair and whereabouts of Analie and
Hilario before the killing of the latter. Roberto, a security guard, on his way home, was told by a certain Amadong
Bisaya about seeing his wife with their youngest child and Tisoy (referring to HIlario) board a jeep going to Lumang
bayan (where Analie and Hilario are renting a house together). He then asked Bisaya to accompany him to the place.
Roberto having with him his service gun, used the same in killing Hilario with a single shot on the head. The
prosecution offered Analie and the deceased neighbor as witnesses. No objection was raised on Analie’s testimony.
Accused was judged guilty of the crime.

ISSUE:
Whether or not it violates the marital disqualification rule?

HELD:

NO. The testimony was admitted.

As the legitimate wife of appellant, Analies testimony would have been disregarded had appellant timely objected to
her competency to testify under the marital disqualification rule.Under this rule, neither the husband nor the wife
may testify for or against the other without the consent of the affected spouse, except in a civil case by one against
the other, or in a criminal case for a crime committed by one against the other or the latters direct descendants or
ascendants. However, objections to the competency of a husband and wife to testify in a criminal prosecution
against the other may be waived as in the case of other witnesses generally. The objection to the competency of the
spouse must be made when he or she is first offered as a witness. In this case, the incompetency was waived by
appellants failure to make a timely objection to the admission of Analies testimony.

We note that Rogelio was presented to corroborate Analies testimony, but he gave a rather confusing account of
what he allegedly saw or heard on the night of the shooting. During his direct examination, he claimed that he heard
a gunshot, but on cross-examination he claimed that he opened the door of his house and actually saw appellant
shoot Hilario. In any event, it is well-settled that the testimony of a lone eyewitness, if credible and positive, is
sufficient to convict an accused.

3. US v. Antipolo

THE UNITED STATES v. DALMACIO ANTIPOLO (1918)

DECLARATION OF DECEASED HUSBAND,

ADMISSIBLE. NO LONGER WIFE, ADMISSION NOT
CONFIDENTIAL
DOCTRINE: The declarations of a deceased person while in anticipation of certain impending death, concerning
the circumstances leading up to the death, are admissible in a prosecution of the person charged with killing the
declarant.

FACTS: The appellant was prosecuted in CFI Btatangas. He was charged with the murder of one Fortunato Dinal.
The trial court convicted him of homicide and from that decision he has appealed. One of the errors assigned is
based upon the refusal of the trial judge to permit Susana Ezpeleta, the widow of the deceased, to testify as a witness
on behalf of the defense concerning certain alleged dying declarations.
The witness was called to the stand and having stated that she is the widow of Fortunato Dinal was asked: "On what
occasion did your husband die?" To this question the fiscal objected: "I object to the testimony of this witness. She
has just testified that she is the widow of the deceased, Fortunato Dinal, and that being so I believe that she is not
competent to testify under the rules of procedure in either civil or criminal cases, unless it be with the consent of her
husband, and as he is dead and cannot grant that permission, it follows that this witness is disqualified from
testifying in this case in which her husband is the injured party.”

Section 58 of General Orders No. 58 (1900) reads as follows: "Except with the consent of both, or except in
cases of crime committed by one against the other, neither husband nor wife shall be a competent witness
for or against the other in a criminal action or proceeding to which one or both shall be parties."

ISSUE: Whether the testimony of the deceased’s widow regarding the dying declaration of her murdered husband
may be admitted

RULING: YES. The reasons for rule Section 58 of General Orders No. 58 (1900) are thus stated in Underhill’s
work on Criminal Evidence (second edition) on page 346: "At common law, neither a husband nor a wife was a
competent witness for or against the other in any judicial proceedings, civil or criminal, to which the other was a
party. . . . If either were recognized as a competent witness against the other who was accused of crime, . . . a very
serious injury would be done to the harmony and happiness of husband and wife and the confidence which should
exist between them."

In Greenleaf’s classical work on evidence, in section 337 [vol. I], the author says, in stating the reason for the rule at
common law: "The great object of the rule is to secure domestic happiness by placing the protecting seal of the law
upon all confidential communications between husband and wife; and whatever has come to the knowledge of either
by means of the hallowed confidence which that relation inspires, cannot be afterwards divulged in testimony even
through the other party be no longer living." library

This case does not fall with the text of the statute or the reason upon which it is based. The purpose of section 58 is
to protect accused persons against statements made in the confidence engendered by the marital relation, and to
relieve the husband or wife to whom such confidential communications might have been made from the obligation
of revealing them to the prejudice of the other spouse. Obviously, when a person at the point of death as a result of
injuries he has suffered makes a statement regarding the manner in which he received those injuries, the
communication so made is in no sense confidential. On the contrary, such a communication is made for the express
purpose that it may be communicated after the death of the declarant to the authorities concerned in inquiring into
the cause of his death.

The declarations of a deceased person while in anticipation of certain impending death, concerning the
circumstances leading up to the death, are admissible in a prosecution of the person charged with killing the
declarant. (U. S. v. Gil, 13 Phil. Rep., 530.) Such dying declaration are admissible in favor of the defendant as well
as against him. (Mattox v. U. S., 146 U. S., 140.) It has been expressly held in several jurisdictions in the United
States that the widow of the deceased may testify regarding his dying declarations. In the case of the State v. Rayan
(30 la. Ann., 1176), cited by appellant in his brief, the court said: "The next bill is as to the competency of the
widow of the deceased to prove his dying declarations. We see no possible reason for excluding her . . . after the
husband’s death she is no longer his wife, and the rules of evidence, as between husbands and wives, are no longer
applicable."

DISPOSITIVE: The judgment of the court below is hereby set aside, and a new trial is granted at which the
testimony of the witness Susana Ezpeleta will be admitted.
4. PEOPLE vs. CARLOS’
 5. people vs Sandiganbayan ATTORNEY CLIENT RELATIONSHIP-
PAST CRIME PRIVELEGED COMM.
People of the Philippines vs. Honorable Sandiganbayan, G.R. Nos. 115439-41, July 16, 1997

FACTS: The case involves a prominent politician in Mindanao, respondent Ceferino Paredes, Jr., who was formerly
the Provincial Attorney of Agusan del Sur, then Governor, and Congressman. During his stint, Paredes applied for
and was granted a free patent over a vast tract of land. However, it was cancelled because apparently, it has already
been designated and reserved as a school site. The court found that Paredes had obtained title thereto through
fraudulent misrepresentations in his application, and somebody came forward and filed a case of perjury against
him. However, the same was dismissed on the ground of prescription. Then again, another case was filed against
him for violation of RA 3019 (Anti-Graft and Corrupt Practices Act) for using his former position as Provincial
Attorney to influence and induce the Bureau of Lands officials to favorably act on his application for patent. In all
these cases, Paredes was represented by respondent Atty. Sansaet, a practicing attorney.

Paredes, as defense, contends that he has already been charged under the same set of facts and the same evidence
where such complaint (perjury case where he was already arraigned) has already been dismissed. Hence, double
jeopardy has already attached. In support hereof, Paredes presented court records and transcripts as proof of his
arraignment in the perjury case.

However, the documents were found to be falsified, in conspiracy with Paredes’ counsel and the clerk of court
where the perjury case was filed. One Teofilo Gelacio claims that no notice of arraignment was ever received by the
Office of the Provincial Fiscal. Hence, another case was filed for falsification of judicial records. It was then that
respondent Sansaet offered to testify as a state witness against his client Paredes, claiming that the latter contrived
and induced him to have the graft case dismissed on the ground of double jeopardy by having him and co-
respondent prepare and falsify the subject documents.

But the Sandiganbayan denied the motion on the ground of attorney-client privilege since the lawyer could not
testify against his own client. In view of such relationship, confidential matters must have been disclosed by
Paredes, as client, to accused Sansaet, as his lawyer, in his professional capacity, and therefore privileged.

ISSUE: Whether or not the testimony of respondent Sansaet, as proposed state witness, is barred by attorney-client
privilege.

HELD: No. There is no privileged communication rule to talk about. The privilege applies only if the information
was relayed by the client to the lawyer respecting a past crime. The reckoning point is when the communication was
given, not when the lawyer was made to testify.

The attorney-client privilege cannot apply in these cases as the facts thereof and the actuations of both respondents
therein constitute an exception to the rule.

It may be correctly assumed that there was a confidential communication made by Paredes to Sansaet in connection
with the criminal cases since the latter served as his counsel therein. The privilege is not confined to verbal or
written communications made by the client to his attorney but extends as well to information communicated by
other means. IOW, including physical acts. The acts and words of the parties, therefore, during the period when the
documents were being falsified were necessarily confidential since Paredes would not have invited Sansaet to his
house and allowed him to witness the same except under conditions of secrecy and confidence.

However, the announced intention of a client to commit a crime is not included within the confidences which his
attorney is bound to respect. It is true that by now, insofar as the falsifications are concerned, those crimes were
necessarily committed in the past. But for the privilege to apply, the period to be considered is the date when the
privileged communication was made by the client to the attorney in relation to either a crime committed in the past
or with respect to a crime intended to be committed in the future. IOW, if the client seeks his lawyer’s advice with
respect to a crime which he has already committed, he is given the protection of a virtual confessional seal which the
privilege declares cannot be broken by the attorney without the client’s consent. The same privileged confidentiality,
however, does not attach with regard to a crime a client intends to commit thereafter or in the future and for
purposes of which he seeks the lawyer’s advice.

Here, the testimony sought to be elicited from Sansaet as state witness are the communications made to him by
physical acts and/or accompanying words of Paredes at the time he and Honrada were about to falsify the
documents. Clearly, therefore, the confidential communications thus made by Paredes to Sansaet were for purposes
of and in reference to the crime of falsification which had not yet been committed in the past by Paredes but which
he, in confederacy with his present co-respondents, later committed. Having been made for purposes of
a future offense, those communications are outside the pale of the attorney-client privilege.

It is well settled that communication between a lawyer and his client, to be privileged, must be for a lawful purpose
or in furtherance of a lawful end. The existence of an unlawful purpose prevents the privilege from attaching. In
fact, the prosecution of the honorable relation of attorney and client will not be permitted under the guise of
privilege, and every communication made to an attorney by a client for a criminal purpose is a conspiracy or attempt
at a conspiracy which is not only lawful to divulge, but which the attorney under certain circumstances may be
bound to disclose at once in the interest of justice.

To prevent a conniving counsel from revealing the genesis of a crime which was later committed pursuant to a
conspiracy, because of the objection thereto of his conspiring client, would be one of the worst travesties in the rules
of evidence and practice in the noble profession of law.

6. Lim v. Court of Appeals, G.R. No. 91114, September 25, 1992 – EXPERT
TESTIMONY OF PHYSICIAN,
HUSBAND’S ILLNESS
Facts:

Petitioner and respondent Sim were married until the latter filed for annulment on the ground that petitioner has
been allegedly suffering from a mental illness called schizophrenia “before, during and after the marriage and until
the present.”
During the trial, respondent presented as a witness Dr. Acampado who had examined the petitioner in a professional
capacity and had diagnosed her to be suffering from schizophrenia.

Petitioner filed a motion to oppose the testimony claiming that the doctor would divulge privileged communication
pertaining to petitioner w/c was covered by doctor-patient confidentiality.

Respondent said that Dr. Acampado would only be appearing as an expert witness and would not testify on any
information acquired while attending to the petitioner in a professional capacity.

Issue:

WON Dr. Acampado should be allowed to testify.

Held:

Yes. The SC held after a careful scrutiny of the transcript of Dr. Acampado’s testimony, We find no declaration that
touched or disclosed any information which she has acquired from her patient, Nelly Lim, during the period she
attended her patient in a professional capacity. Although she testified that she examined and interviewed the patient,
she did not disclose anything she obtained in the course of her examination, interview and treatment of her patient.
Given a set of facts and asked a hypothetical question, Dr. Acampado rendered an opinion regarding the history and
behaviour of the fictitious character in the hypothetical problem. The facts and conditions alleged in the hypothetical
problem did not refer and had no bearing to whatever information or findings the doctor obtained from attending the
patient. A physician is not disqualified to testify as an expert concerning a patient’s ailment, when he can disregard
knowledge acquired in attending such patient and make answer solely on facts related in  the hypothetical question.

REPORT THIS AD

Expert testimony of a physician based on hypothetical question as to cause of illness of a person whom he has
attended is not privileged, provided the physician does not give testimony tending to disclose confidential
information related to him in his professional capacity while attending to the patient.

The rule on privilege communication in the relation of physician and patient proceeds from the fundamental
assumption that the communication to deserve protection must be confidential in their origin. Confidentiality is not
to be blindly implied from the mere relation of physician and patient. It might be implied according to circumstances
of each case, taking into consideration the nature of the ailment and the occasion of the consultation. The claimant of
the privilege has the burden of establishing in each instance all the facts necessary to create the privilege, including
the confidential nature of the information given.”

These requisites conform with the four (4) fundamental conditions necessary for the establishment of a privilege
against the disclosure of certain communications, to wit:

“1.      The communications must originate in a confidence that they will not be disclosed.

2.        This element of confidentiality must be essential to the full and satisfactory maintenance of the relation
between the parties.

3.        The relation must be one which in the opinion of the community ought to be sedulously fostered

4.        The injury that would inure to the relation by the disclosure of the communications must be greater than the
benefit thereby gained for the correct disposal of litigation.” 15

The physician may be considered to be acting in his professional capacity when he attends to the patient for curative,
preventive, or palliative treatment. Thus, only disclosures which would have been made to the physician to enable
him “safely and efficaciously to treat his patient” are covered by the privilege. 16 It is to be emphasized that “it is
the tenor only of the communication that is privileged. The mere fact of making a communication, as well as the
date of a consultation and the number of consultations, are therefore not privileged from disclosure, so long as the
subject communicated is not stated.”
One who claims this privilege must prove the presence of these aforementioned requisites.

Facts:
Petitioner Nelly Lim and private respondent are lawfully married to each other. On 25 November 1987, Private
respondent filed with the RTC of Pangasinan, a petition for annulment of such marriage on the ground that petitioner
has been allegedly suffering from a schizophrenia “before, during and after the marriage and until the present.” After
the issues were joined and the pre-trial was terminated, trial on the merits ensued.

Private respondent’s counsel announced that he would present as his next witness the Chief of the Female Services
of the National Mental Hospital, Dr. Lydia Acampado, a Doctor of Medicine who specializes in Psychiatry.
Petitioner’s counsel opposed the motion on the ground that the testimony sought to be elicited from the witness is
privileged since the latter had examined the petitioner in a professional capacity and had diagnosed her to be
suffering from schizophrenia.Petitioner's counsel argued that having seen and examined the petitioner in a
professional capacity, Dr. Acampado is barred from testifying under the rule on the confidentiality of a physician-
patient relationship. Counsel for private respondent contended, however, that Dr. Acampado would be presented as
an expert witness and would not testify on any information acquired while attending to the petitioner in a
professional capacity.

The trial court denied the motion and allowed the witness to testify. Dr. Acampado thus took the witness stand, was
qualified by counsel for private respondent as an expert witness and was asked hypothetical questions related to her
field of expertise. She neither revealed the illness she examined and treated the petitioner for nor disclosed the
results of her examination and the medicines she had prescribed.

Petitioner filed with the public respondent Court of Appeals a petition to prohibit him from proceeding with the
reception of Dr. Acampado’s testimony. However, the Court of Appeals promulgated a resolution denying due
course to the petition.

Held:
The petition is devoid of any merit. The law in point is paragraph (c), Section 24 of the Revised Rules on Evidence
which reads:

“SEC. 24. Disqualification by reason of privileged communication.―The following persons cannot testify as to
matters learned in confidence in the following cases: x x x
(c) A person authorized to practice medicine, surgery or obstetrics cannot in a civil case, without the consent of the
patient, be examined as to any advice or treatment given by him or any information which he may have acquired in
attending such patient in a professional capacity, which information was necessary to enable him to act in that
capacity, and which would blacken the reputation of the patient.”

This rule on the physician-patient privilege is intended to facilitate and make safe full and confidential disclosure by
the patient to the physician of all facts, circumstances and symptoms, untrammeled by apprehension of their
subsequent and enforced disclosure and publication on the witness stand, to the end that the physician may form a
correct opinion, and be enabled safely and efficaciously to treat his patient. It rests in public policy and is for the
general interest of the community.

Our careful evaluation of the submitted pleadings leads Us to no other course of action but to agree with the
respondent Court’s observation. In the first place, Dr. Acampado was presented and qualified as an expert witness.
As correctly held by the Court of Appeals, she did not disclose anything obtained in the course of her examination,
interview and treatment of the petitioner; moreover, the facts and conditions alleged in the hypothetical problem did
not refer to and had no bearing on whatever information or findings the doctor obtained while attending to the
patient. There is, as well, no showing that Dr. Acampado’s answers to the questions propounded to her relating to
the hypothetical problem were influenced by the information obtained from the petitioner. Otherwise stated, her
expert opinion excluded whatever information or knowledge she had about the petitioner which was acquired by
reason of the physician-patient relationship existing between them. As an expert witness, her testimony before the
trial court cannot then be excluded. Also, Dr. Acampado never disclosed any information obtained from the
petitioner regarding the latter’s ailment and the treatment recommended therefore.
7. Chan vs. Chan: ISSUANCE OF SDT PREMATURE, HOSPITAL
RECORDS

Facts:
Petitioner wife (Josielene Lara) filed against respondent husband (Johnny) a petition for the declaration of nullity of
marriage, with the dissolution of their conjugal partnership of gains, and the award of custody of their children to
her, claiming that respondent husband failed to care for and support his family and that a psychiatrist diagnosed him
as mentally deficient due to incessant drinking and excessive use of prohibited drugs. Meanwhile, respondent
husband claims that it was the wife who failed in her duties. And that he initially agreed to marriage counseling to
save their marriage, but upon arriving at the hospital, two men forcibly held him by both arms while another gave
him an injection. He attached a Philhealth Claim Form to his answer as proof that he was forcibly confined at the
rehabilitation unit of a hospital. However, that same form carried a physician’s handwritten note that the husband
suffered from ―methamphetamine and alcohol abuse. Based on the physician’s handwritten statement, petitioner
wife requested for the issuance of a subpoena duces tecum addressed to Medical City, for the production of the
husband’s medical records. The husband opposed, arguing that the medical records were covered by physician-
patient privilege. The request of petitioner wife was denied and her subsequent motion for reconsideration on the
matter was also denied. She then filed a petition for certiorari with the Court of Appeals but this was also dismissed.
Her subsequent motion for reconsideration with the CA was also denied. Hence, this petition for

Issue:
Whether CA erred in ruling that the trial court correctly denied the issuance of a subpoena duces tecum covering
Johnny’s hospital records on the ground that these are covered by the privileged character of the physician-patient
communication?

Ruling:
The Supreme Court sustained the previous ruling. It stated that the issuance of a subpoena duces tecum is premature.
The petitioner wife made the request before trial started. She will have to wait for trial to begin before making a
request for the issuance of a subpoena duces tecum covering her husband’s hospital records. It is when those records
are produced for examination at the trial, that the husband may opt to object, not just to their admission in evidence,
but more so to their disclosure. Petitioner wife’s motion for the issuance of the subpoena duces tecum also cannot be
treated as a motion for production of documents as a mode of discovery because Rule 27, Section 1 of the Rules of
Court is only limited to disclosure of documents which are “not privileged”. Petitioner wife claims that the
documents are not privileged because it is the testimony of the physician that is supposed to be privileged. This
contention is wrong.

Section 24(c) of Rule 130 states that the physician ― cannot in a civil case, without the consent of the patient,
be examined regarding their (physician-patient) professional conversation.

To allow the disclosure during discovery procedure of the hospital records (including the results of tests that the
physician ordered, the diagnosis of the patient’s illness, and the advice or treatment given) would, in effect, be
tantamount to allowing access to evidence that is inadmissible without the patient’s consent. Disclosing them would
be the equivalent of compelling the physician to testify on privileged matters he gained while dealing with the
patient, without the latter’s prior consent. Lastly, Petitioner wife argues that her husband already admitted in his
answer that he had been confined in a hospital. However, as already mentioned above, trial in the case had not yet
begun. Since trial had not yet begun, it cannot be said the Husband had already presented said Philhealth claim form
as evidence. The husband was not yet bound to adduce evidence in the case when he filed his answer. Any request
for disclosure of his hospital records would again be premature.

For all of the above reasons, the CA and the RTC were justified in denying Josielene her request for the production
in court of Johnny’s hospital records. Court denies the petition and affirms the Decision of the Court of Appeals.
8. ALMONTE VS VASQUEZ – GOVERNMENT PRIVILEGE, INVESTIGATION OF
FUNDS

FACTS: 

Ombudsman Vasquez required Rogado and Rivera of Economic Intelligence and Investigation Bureau (EIIB) to
produce all documents relating to Personal Service Funds yr. 1988 and all evidence for the whole plantilla of EIIB
for 1988. The subpoena duces tecum was issued in connection with the investigation of funds representing savings
from unfilled positions in the EIIB which were legally disbursed. Almonte and Perez  denied the anomalous
activities that circulate around the EIIB office.  They moved to quash the subpoena duces tecum. They claim
privilege of an agency of the Government.

ISSUE:

Whether or not an Ombudsman can oblige the petitioners by virtue of subpoena duces tecum to provide documents
relating to personal service and salary vouchers of EIIB employers.

RULING:

Yes. A government privilege against disclosure is recognized with respect to state secrets bearing on military,
diplomatic and similar matters. This privilege is based upon public interest of such paramount importance as in and
of itself transcending the individual interests of a private citizen, even though, as a consequence thereof, the plaintiff
cannot enforce his legal rights.

In the case at bar, there is no claim that military or diplomatic secrets will be disclosed by the production of records
pertaining to the personnel of the EIIB. EIIB's function is the gathering and evaluation of intelligence reports and
information regarding "illegal activities affecting the national economy, such as, but not limited to, economic
sabotage, smuggling, tax evasion, dollar salting." Consequently while in cases which involve state secrets it may be
sufficient to determine the circumstances of the case that there is reasonable danger that compulsion of the evidence
will expose military matters without compelling production, no similar excuse can be made for privilege resting on
other considerations.

Facts:
This is a case wherein respondent Ombudsman, requires petitioners Nerio Rogado and Elisa Rivera, as chief
accountant and record custodian, respectively, of the Economic Intelligence and Investigation Bureau (EIIB) to
produce "all documents relating to Personal Services Funds for the year 1988" and all evidence such as vouchers
from enforcing his orders.

Petitioner Almonte was formerly Commissioner of the EIIB, while Perez is Chief of the EIIB's Budget and Fiscal
Management Division. The subpoena duces tecum was issued by the Ombudsman in connection with his
investigation of an anonymous letter alleging that funds representing savings from unfilled positions in the EIIB had
been illegally disbursed. The letter, purporting to have been written by an employee of the EIIB and a concerned
citizen, was addressed to the Secretary of Finance, with copies furnished several government offices, including the
Office of the Ombudsman.

May be erased: [The letter reads in pertinent parts: that the EIIB has a syndicate headed by the Chief of Budget
Division who is manipulating funds and also the brain of the so called "ghost agents" or the "Emergency Intelligence
Agents" (EIA); that when the agency had salary differential last Oct '88 all money for the whole plantilla were
released and from that alone, Millions were saved and converted to ghost agents of EIA; Almost all EIIB agents
collects payroll from the big time smuggler syndicate monthly and brokers every week for them not to be
apprehended.]

In his comment on the letter-complaint, petitioner Almonte denied all the allegations written on the anonymous
letter. Petitioners move to quash the subpoena and the subpoena duces tecum but was denied.

Disclosure of the documents in question is resisted with the claim of privilege of an agency of the government on
the ground that "knowledge of EIIB's documents relative to its Personal Services Funds and its plantilla . . . will
necessarily [lead to] knowledge of its operations, movements, targets, strategies, and tactics and the whole of its
being" and this could "destroy the EIIB."

Issue:
Whether petitioners can be ordered to produce documents relating to personal services and salary vouchers of EIIB
employees on the plea that such documents are classified without violating their equal protection of laws.

Held:
 YES. At common law a governmental privilege against disclosure is recognized with respect to state secrets bearing
on military, diplomatic and similar matters and in addition, privilege to withhold the identity of persons who furnish
information of violation of laws. In the case at bar, there is no claim that military or diplomatic secrets will be
disclosed by the production of records pertaining to the personnel of the EIIB. Indeed, EIIB's function is the
gathering and evaluation of intelligence reports and information regarding "illegal activities affecting the national
economy, such as, but not limited to, economic sabotage, smuggling, tax evasion, dollar salting." Consequently,
while in cases which involve state secrets it may be sufficient to determine from the circumstances of the case that
there is reasonable danger that compulsion of the evidence will expose military matters without compelling
production, no similar excuse can be made for a privilege resting on other considerations.

The Ombudsman is investigating a complaint that several items in the EIIB were filled by fictitious persons and that
the allotments for these items in 1988 were used for illegal purposes. The plantilla and other personnel records are
relevant to his investigation as the designated “protectors of the people” of the Constitution.

Nor is there violation of petitioners' right to the equal protection of the laws. Petitioners complain that "in all forum
and tribunals . . . the aggrieved parties . . . can only hale respondents via their verified complaints or sworn
statements with their identities fully disclosed," while in proceedings before the Office of the Ombudsman
anonymous letters suffice to start an investigation. In the first place, there can be no objection to this procedure
because it is provided in the Constitution itself. In the second place, it is apparent that in permitting the filing of
complaints "in any form and in a manner," the framers of the Constitution took into account the well-known
reticence of the people which keep them from complaining against official wrongdoings. As this Court had occasion
to point out, the Office of the Ombudsman is different from the other investigatory and prosecutory agencies of the
government because those subject to its jurisdiction are public officials who, through official pressure and influence,
can quash, delay or dismiss investigations held against them. On the other hand complainants are more often than
not poor and simple folk who cannot afford to hire lawyers
.
Finally, it is contended that the issuance of the subpoena duces tecum would violate petitioners' right against self-
incrimination. It is enough to state that the documents required to be produced in this case are public records and
those to whom the subpoena duces tecum is directed are government officials in whose possession or custody the
documents are. Moreover, if, as petitioners claim the disbursement by the EII of funds for personal service has
already been cleared by the COA, there is no reason why they should object to the examination of the documents by
respondent Ombudsman.
ALMONTE V. VASQUEZ, 244 SCRA 286,

Facts:
Ombudsman Vasquez required Rogado and Rivera of Economic Intelligence and Investigation Bureau (EIIB) to
produce all documents relating to Personal Service Funds yr. 1988 and all evidence for the whole plantilla of EIIB
for 1988. The subpoena duces tecum was issued in connection with the investigation of funds representing savings
from unfilled positions in the EIIB which were legally disbursed. Almonte and Perez denied the anomalous activities
that circulate around the EIIB office. They moved to quash the subpoena duces tecum. They claim privilege of an
agency of the Government.

Petitioner Jose T. Almonte was formerly Commissioner of the EIIB, while Villamor C. Perez is Chief of the EIIB's
Budget and Fiscal Management Division. The subpoena duces tecum was issued by the Ombudsman in connection
with his investigation of an anonymous letter alleging that funds representing savings from unfilled positions in the
EIIB had been illegally disbursed. The letter, purporting to have been written by an employee of the EIIB and a
concerned citizen, was addressed to the Secretary of Finance, with copies furnished several government offices,
including the Office of the Ombudsman.

Petitioners Almonte and Perez moved to quash the subpoena and the subpoena duces tecum. In his Order dated June
15, 1990, respondent Ombudsman granted the motion to quash the subpoena in view of the fact that there were no
affidavits filed against petitioners. But he denied their motion to quash the subpoena duces tecum. He ruled that
petitioners were not being forced to produce evidence against themselves, since the subpoena duces tecum was
directed to the Chief Accountant, petitioner Nerio Rogado. In addition the Ombudsman ordered the Chief of the
Records a Section of the EIIB, petitioner Elisa Rivera, to produce before the investigator "all documents relating to
Personnel Service Funds, for the year 1988, and all documents, salary vouchers for the whole plantilla of the EIIB
for 1988, within ten (10) days from receipt hereof."

Issue:

Whether or not the Ombudsman may start an investigation on the basis of an anonymous letter does not violate the
equal protection clause.

Ruling:
The court dismissed the petition. It was held that the fact that the Ombudsman may start an investigation on the basis
of an anonymous letter does not violate the equal protection clause. Petitioners complain that "in all forum and
tribunals . . . the aggrieved parties . . . can only hale respondents via their verified complaints or sworn statements
with their identities fully disclosed," while in proceedings before the Office of the Ombudsman anonymous letters
suffice to start an investigation.

In the first place, there can be no objection to this procedure because it is provided in the Constitution itself. In the
second place, it is apparent that in permitting the filing of complaints "in any form and in a manner," the framers of
the Constitution took into account the well-known reticence of the people which keep them from complaining
against official wrongdoings. As this Court had occasion to point out, the Office of the Ombudsman is different
from the other investigatory and prosecutory agencies of the government because those subject to its jurisdiction are
public officials who, through official pressure and influence, can quash, delay or dismiss investigations held against
them.
9. STEPMOM TO TESTIFY
Emma Lee vs. CA Case Digest

AGAINST STEP DAUGHTER – DIRECT

LINE
Facts:
Spouses Lee and Keh entered the Philippines in the 1930s as immigrants from China. They had 11 children.

In 1948, Lee brought from China a young woman named Tiu supposedly to serve as housemaid. The respondent
Lee-Keh children believe that Tiu left the Lee-Keh household, moved into another property of Lee nearby, and had a
relation with him.

Shortly after Keh died in 1989, the Lee-Keh children learned that Tiu's children with Lee claimed that they, too,
were children of Lee and Keh. This prompted the Lee-Keh children to request the NBI to investigate the matter.
After investigation, the NBI concluded that the mother of the 8 children is certainly not Keh, but a much younger
woman, most probably Tiu.
On the basis of this report, the respondent Lee-Keh children filed a petition for the deletion from the certificate of
live birth of the petitioner Emma Lee, one of Lees other children, the name Keh and replace the same with the name
Tiu to indicate her true mothers name.

The Lee-Keh children filed with the RTC an ex parte request for the issuance of a subpoena ad testificandum to
compel Tiu, Emma Lees presumed mother, to testify in the case. The RTC granted the motion but Tiu moved to
quash the subpoena, claiming that it was oppressive and violated Section 25, Rule 130 of the Rules of Court, the rule
on parental privilege, she being Emma Lee's stepmother. The RTC quashed the subpoena it issued for being
unreasonable and oppressive considering that Tiu was already very old and that the obvious object of the subpoena
was to badger her into admitting that she was Emma Lees mother.

The CA ruled that only a subpoena duces tecum, not a subpoena ad testificandum, may be quashed for being
oppressive or unreasonable under Section 4, Rule 21 of the Rules of Civil Procedure. The CA also held that Tiu's
advanced age alone does not render her incapable of testifying. The party seeking to quash the subpoena for that
reason must prove that she would be unable to withstand the rigors of trial, something that petitioner Emma Lee
failed to do.

Issues:
May a stepmother be compelled to testify against her stepdaughter?

Held:
Yes. Section 25, Rule 130 of the Rules of Evidence reads:

 Sec. 25. Parental and filial privilege.- No person may be compelled to testify against his parents, other direct
ascendants, children or other direct descendants.

The above is an adaptation from a similar provision in Article 315 of the Civil Code that applies only in criminal
cases. But those who revised the Rules of Civil Procedure chose to extend the prohibition to all kinds of actions,
whether civil, criminal, or administrative, filed against parents and other direct ascendants or descendants.

But here Tiu, who invokes the filial privilege, claims that she is the stepmother of petitioner Emma Lee. The
privilege cannot apply to them because the rule applies only to direct ascendants and descendants, a family tie
connected by a common ancestry. A stepdaughter has no common ancestry by her stepmother. Article 965 thus
provides:

 Art. 965. The direct line is either descending or ascending. The former unites the head of the family with those who
descend from him. The latter binds a person with those from whom he descends.

Consequently, Tiu can be compelled to testify against petitioner Emma Lee. (Emma Lee vs. Court of Appeals, G.R.
No. 177861, July 13, 2010)

FACTS:
Spouses Lee Tek Sheng (Lee) and Keh Shiok Cheng (Keh) had 11 children, herein respondents. Lee had a relation
with another woman named Tiu Chuan (Tiu).

Shortly after their mother died in 1989, respondents learned that Tiu’s children with their father (collectively, the
Lee’s other children) claimed that they, too, were children of Lee and Keh. The respondents requested the National
Bureau of Investigation (NBI) to investigate the matter. The NBI found that the hospital records of Lee’s other
children, Keh’s declared age did not coincide with her actual age when she supposedly gave birth to such other
children.
The respondents, children of Lee and Keh, filed two separate petitions, one of them in Special Proceeding, for the
deletion from the certificate of live birth of the petitioner Emma Lee, one of Lee’s other children, the name Keh and
replace the same with the name Tiu to indicate her true mother’s name.

The respondents filed with the RTC an ex parte request for the issuance of a subpoena ad testificandum to compel
Tiu, Emma Lee’s presumed mother, to testify in the case. The RTC granted the motion but Tiu moved to quash the
subpoena, claiming that it was oppressive and violative of the rule on parental privilege, she being Emma Lee’s
stepmother.

RTC’s decison: quashed the subpoena it issued for being unreasonable and oppressive considering that Tiu was
already very old and that the obvious object of the subpoena was to badger her into admitting that she was Emma
Lee’s mother.

CA’s decision: set aside RTC’s decision and ruled that only a subpoena duces tecum, not a subpoena ad
testificandum, may be quashed for being oppressive or unreasonable under Section 4, Rule 21 of the Rules of Civil
Procedure.

ISSUES:
1. Can parental and filial privilege be invoked by a stepdaughter or a stepparent?
2. Are the grounds “unreasonable and oppressive” proper for quashing a subpoena ad testificandum?

RULING:
1.No. The privilege cannot be applied because the rule applies only to “direct” ascendants and descendants, a family
tie connected by a common ancestry. A stepdaughter has no common ancestry by her stepmother as in the present
case. The privilege provides that no person may be compelled to testify against his parents, other direct ascendants,
children or other direct descendants. The direct line is either descending or ascending. The former unites the head of
the family with those who descend from him. The latter binds a person with those from whom he descends.

2. No. These grounds are proper for subpoena ad duces tecum or for the production of documents and things in the
possession of the witness.  A subpoena duces tecum is a command that has a tendency to infringe on the right
against invasion of privacy. Section 4, Rule 21 of the Rules of Civil Procedure provides that the court may quash a
subpoena duces tecum upon motion promptly made and, in any event, at or before the time specified therein if it is
unreasonable and oppressive, or the relevancy of the books, documents or things does not appear, or if the person in
whose behalf the subpoena is issued fails to advance the reasonable cost of the production thereof.

Moreover, the one claiming that a witness may be subjected to physical and emotional punishment if she were
compelled at her age and condition to come to court to testify, must establish this claim to the satisfaction of the trial
court. The trial court would have to determine if the witness’ current physical condition makes her fit to undergo the
ordeal of coming to court and being questioned. If she is fit, she must obey the subpoena issued to her. One should
not worry that the oral examination might subject a witness to badgering by adverse counsel because it is the trial
court’s duty to protect every witness against oppressive behavior of an examiner and this is especially true where the
witness is of advanced age.
10.

HILIPPINE ASSOCIATED SMELTING AND REFINING CORPORATION, Petitioner, v. PABLITO O.

LIM, MANUEL A. AGCAOILI, AND CONSUELO M. PADILLA, Respondents.

An action for injunction filed by a corporation generally does not lie to prevent the enforcement by a stockholder of
his or her right to inspection. 1

Philippine Associated Smelting and Refining Corporation filed a Petition for Review on Certiorari 2 to assail the
Court of Appeals Decision3 dated January 243 2006 and Resolution4 dated May 18, 2006, The Court of Appeals
lifted and cancelled the writ of preliminary injunction issued by the Regional Trial Court, 5 which enjoined
respondents Pablito O. Lim (Lim), Manuel A. Agcaoili (Agcaoili), and Consuelo M. Padilla (Padilla), or their
representatives, from gaining access to the records of Philippine Associated Smelting and Refining Corporation.:
The records were then classified as either confidential or inexistent until further orders from the court. 6

As summarized by the Court of Appeals, the facts are as follows:chanRoblesvirtualLawlibrary

Philippine Associated Smelting and Refining Corporation (hereafter PASAR) is a corporation duly organized and
existing under the laws of the Philippines and is engaged in copper smelting and refining.

On the other hand, Pablito Lim, Manuel Agcaoili and Consuelo Padilla (collectively referred to as petitioners) were
former senior officers and presently shareholders of PASAR holding 500 shares each.

An Amended Petition for Injunction and Damages with prayer for Preliminary Injunction and/or Temporary
Restraining Order, dated February 4, 2004 was filed by PASAR seeking to restrain petitioners from demanding
inspection of its confidential and inexistent records.

On February 23, 2004, petitioners moved for the dismissal of the petition on the following grounds: 1) the petition
states no cause of action; 2) the petition should be dismissed on account of litis pendentia; 3) the petition is a
nuisance or harassment suit; and 4) the petition should be dismissed on account of improper venue.

On April 14, 2004, the RTC issued an Order granting PASAR's prayer for a writ of preliminary injunction. The RTC
held that the right to inspect book should not be denied to the stockholders, however, the same may be restricted.
The right to inspect should be limited to the ordinary records as identified and classified by PASAR. Thus, pending
the determination of which records are confidential or inexistent, the petitioners should be enjoined from inspecting
the books. The dispositive portion of said Order states:chanRoblesvirtualLawlibrary
"WHEREFORE, let a writ of preliminary injunction be issued enjoining respondents Pablito Lim, Manuel A.
Agcaoili and Consuelo N. Padilla or their representatives from gaining access to records of Philippine Associated
Smelting and Refining Corporation which are presently classified as either confidential or inexistent, until further
orders from this Court.

Petitioner is required to execute a bond in the amount of FIVE HUNDRED THOUSAND PESOS (P500,000.00) in
favor of herein respondents to answer for all damages which the latter may sustain by reason of the injunction
should this Court, finally decide that petitioner is not entitled thereto.

SO ORDERED."
chanrobleslaw
On May 26, 2004, petitioners filed a Motion for Dissolution of the Writ of Preliminary Injunction on the ground that
the petition is insufficient. Petitioners claim that the enforcement of the right to inspect book should be on the
stockholders and not on PASAR. Petitioners further claim that no irreparable injury is caused to PASAR which
justifies the issuance of the writ of preliminary injunction.

On January 10, 2005, the RTC issued the assailed Order, denying the Motion to Dismiss filed by petitioners on the
ground that it is a prohibited pleading under Section 8, Rule 1 of the Interim Rules on Intra-Corporate
Controversies under the Securities Regulation Code (RA 8799). The Motion for Dissolution of the Writ of
Preliminary Injunction was likewise denied on the ground that the writ does not completely result in unjust denial of
petitioners' right to inspect the books of the corporation. The RTC further stated that if no preliminary injunction is
issued, petitioners may, before final judgment, do the act which PASAR is seeking the Court to restrain which will
make ineffectual the final judgment that it may afterward render. 7 (Emphasis in the original)
chanrobleslaw
Aggrieved, Lim, Agcaoili, and Padilla filed before the Court of Appeals a Petition for Certiorari 8 questioning the
propriety of the writ of preliminary injunction. The Court of Appeals held that there was no basis to issue an
injunctive writ, thus:chanRoblesvirtualLawlibrary
We agree. The act of PASAR in filing a petition for injunction with prayer for writ of preliminary injunction is
uncalled for. The petition is a pre-emptive action unjustly intended to impede and restrain the stockholders' rights. If
a stockholder demands the inspection of corporate books, the corporation could refuse to heed to such demand.
When the corporation, through its officers, denies the stockholders of such right, the latter could then go to court and
enforce their rights. It is then that the corporation could set up its defenses and the reasons for the denial of such
right. Thus, the proper remedy available for the enforcement of the right of inspection is undoubtedly the writ of
mandamus to be filed by the stockholders and not a petition for injunction filed by the corporation.

The Order of the RTC shows that indeed there is no basis for the issuance not only of the temporary but also of the
permanent injunctive writ. The Order dated April 14, 2004 states:chanRoblesvirtualLawlibrary
"In the present case, PASAR failed to present sufficient evidence to show that respondents' (petitioners') demand to
inspect the corporate records was not made in good faith nor for a lawful purpose. . . . PASAR is reminded that it is
its burden to prove that respondents' action in seeking examination of the corporate records was moved by unlawful
or ill-motivated designs which could appropriately call for a judicial protection against the exercise of such right[.]" 9
chanrobleslaw
Hence, Philippine Associated Smelting and Refining Corporation filed this Petition praying that this Court render
judgment:chanRoblesvirtualLawlibrary
(a) reversing and setting aside the Decision dated 24 January 2006 and Resolution dated 18 May 2006 rendered by
the Court of Appeals;ChanRoblesVirtualawlibrary

(b) reinstating the writ of preliminary injunction granted by the RTC in its Order dated 14 April 2004, and
consequently ordering respondents to desist from further harassing, vexing, or annoying petitioner with threats of
filing criminal complaints against its President, Bruce Anderson, and other appropriate parties, as embodied in the
letters dated 25 and 27 February 2006 and 31 March 2006;ChanRoblesVirtualawlibrary
(c) reinstating the main action for injunction and ordering the RTC to continue hearing SEC Case No. 04-
33;ChanRoblesVirtualawlibrary

(d) meanwhile, it is respectfully prayed that a temporary restraining order or status quo order be issued by this
Honorable Court to urgently restrain respondents from further committing acts which are bases for the application of
the writ of preliminary injunction.10
chanrobleslaw
In the Resolution11 dated July 19, 2006, this Court denied petitioner's prayer for the issuance of a temporary
restraining order and required respondents Lim, Agcaoili, and Padilla to comment on the Petition.

Respondents filed their Comment12 on October 16, 2006 through counsel Cayetano Sebastian Ata Dado & Cruz. On
October 20, 2006, they filed a second Comment 13 through counsel Siguion Reyna Montecillo & Ongsiako. Petitioner
filed a Motion for Leave to Admit Attached Reply, 14 together with its Reply,15 on December 12, 2006.

In the Resolution16 dated January 24, 2007, this Court noted respondents' separate Comments and petitioner's Reply.
The parties were also directed to submit their respective memoranda within 30 days from notice. 17 Respondents filed
their Memorandum18 on March 26, 2007, and petitioner filed its Memorandum 19 on April 2, 2007.

Petitioner argues that the right of a stockholder to inspect corporate books and records is limited in that any demand
must be made in good faith or for a legitimate purpose.20 Respondents, however, have no legitimate purpose in this
case.21 If respondents gain access to petitioner's confidential records, petitioner's trade secrets and other confidential
information will be used by its former officers to give undue commercial advantage to third parties. 22 Petitioner
insists that to hold that objections to the right of inspection can only be raised in an action for mandamus brought by
the stockholder, would leave a corporation helpless and without an adequate legal remedy. 23 To leave the
corporation helpless negates the doctrine that where there is a right, there is a remedy for its violation. 24

Petitioner argues that it has the right to protect itself against all forms of embarrassment or harassment against its
officers, including the filing of criminal cases against them. 25 Moreover, respondents' request for inspection of
confidential corporate records and documents violates and breaches petitioner's right to peaceful and continuous
possession of its confidential records and documents. 26

Petitioner further argues that respondents' Motion for Dissolution before the Court of Appeals did not comply with
Rule 58, Section 6 of the Rules of Court. Therefore, the Motion should not have been granted. 27 Likewise,
respondents' Motion to Dismiss is a prohibited pleading under Rule 1, Section 8 of the Interim Rules of Procedure
Governing Intra-Corporate Controversies28 and should not have been granted.29 In any case, the Court of Appeals
should have remanded the case to the trial court for further disposition. 30

We are asked to resolve whether injunction properly lies to prevent respondents from invoking their right to inspect.

We deny the Petition.

The Petition asks this Court to enjoin acts beyond what was enjoined by the Regional Trial Court in its April 14,
2004 Order.31 The Regional Trial Court Order did not specify the particular acts it enjoined respondents from
doing:chanRoblesvirtualLawlibrary
The question as to what records should be deemed confidential and inexistent, however, cannot be passed upon at
this time, since neither were admissions made nor sufficient evidence presented to categorically determine which
corporate records are to be considered confidential and inexistent. In the meantime, then, and in order to prevent
grave and irreparable injury on the part of PASAR should otherwise be allowed [sic], respondents' right to inspect is
limited to the ordinary records as identified and classified by PASAR. Subsequent hearings shall be set to determine
which among the corporate records demanded to be inspected by the respondents are indeed confidential or
inexistent, and to further determine whether or not the issuance of a writ of final injunction is in order.

WHEREFORE, let a writ of preliminary injunction be issued enjoining respondents Pablito Lim, Manuel A.
Agcaoili and Consuelo N. Padilla or their representatives from gaining access to records of Philippine Associated
Smelting & Refining Corporation which are presently classified as either confidential or inexistent, until further
orders from this Court.32 (Emphasis supplied)
chanrobleslaw
What precisely is contemplated by the phrase "gaming access to records" is not clear.

Taking advantage of this ambiguity, petitioner prays that the injunction be reinstated and that this Court enjoin
respondents from "harassing, vexing, or annoying petitioner with threats of filing criminal complaints" and from
"further committing acts which are bases for the application of the writ of preliminary
injunction":chanRoblesvirtualLawlibrary
(b) reinstating the writ of preliminary injunction granted by the RTC in its Order dated 14 April 2004, and
consequently ordering respondents to desist from further harassing, vexing, or annoying petitioner with threats of
filing criminal complaints against its President, Bruce Anderson, and other appropriate parties, as embodied in the
letters dated 25 and 27 February 2006 and 31 March 2006;ChanRoblesVirtualawlibrary

.....

(d) meanwhile, it is respectfully prayed that a temporary restraining order or status quo order be issued by this
Honorable Court to urgently restrain respondents from further committing acts which are bases for the application of
the writ of preliminary injunction.33
chanrobleslaw
Petitioner claims that respondents are materially and substantially invading its right to protect itself by demanding to
inspect petitioner's purportedly confidential records. Respondents wrote petitioner and demanded to inspect its
corporate books and records.34 They reiterated this demand in a subsequent letter. 35

On at least two (2) occasions, respondents went to petitioner's office to again demand that they be allowed to
inspect.36 On one of these occasions, respondents brought members of the press, caused work disruption, and
harassed petitioner's representatives who met with them. 37 When asked the purpose of the inspection of certain
records not ordinarily inspected by stockholders, respondents answered they wished to ensure that petitioner's
business transactions were "above board" and "entered into for the best interest of the company." 38

During negotiations on the terms of confidentiality agreements to be executed before respondents are allowed to
inspect certain confidential records, respondents wrote petitioner stating that they would proceed to inspect the
corporate books and records. They warned petitioner that should petitioner fail to allow inspection, they would
initiate legal proceedings against it.39 They refused to accept the final terms and conditions of the confidentiality
agreement and wrote another letter, reiterating their demand to inspect confidential records. 40

After petitioner filed before the Regional Trial Court of Pasig City a Petition for Declaratory Relief 41 seeking a
declaration of the rights and duties of the parties in relation to the inspection of the records, respondent Lim filed a
criminal Complaint42 against some of petitioner's officers for infringing on their right to inspect petitioner's corporate
books and records.43 As a result, a criminal case was filed against Javier Herrero, petitioner's Former President, and
Jocelyn Sanchez-Salazar, its Former Corporate Secretary. 44 Respondents caused news reports to be published on the
arrest warrants issued in relation to these Informations. 45

Respondents wrote another letter dated January 30, 2004 demanding again that they be allowed to inspect, among
others, the confidential records.46 On March 31, 2006, respondents wrote another letter threatening to file criminal
charges if they were not allowed to inspect the confidential records. They stated that they wanted to ensure that
petitioner complied with environmental laws in the operations of its plant in Leyte. 47

On April 7, 2006, petitioner advised respondents that it would furnish them with records kept by the Department of
Environment and Natural Resources. These records supposedly showed that all environmental laws were complied
with.48 On June 28, 2006 and July 4, 2006, respondents Lim and Padilla wrote to demand that they be allowed to
inspect the audited financial statements for 2004 and 2005; the interim statements for the end of May 2006; and
more detailed records on finance, production, marketing, and purchasing. 49
In September 2006, after a stockholders' meeting, respondents again demanded access to certain information and
documents.50 In a letter dated September 8, 2006, respondents again asked about balance sheet accounts, advances to
suppliers, trade and other receivables, inventory, investments, current assets, trade and other payables, related party
transactions, cost of goods manufactured and sold, selling and administrative expenses, other operating expenses,
metal hedging, and staff costs, among others.51

For an action for injunction to prosper, the applicant must show the existence of a right, as well as the actual or
threatened violation of this right.52

Specifically, for a writ of preliminary injunction to be issued, Rule 58 of the Rules of Court
provides:chanRoblesvirtualLawlibrary
RULE 58
PRELIMINARY INJUNCTION

....

SEC. 3. Grounds for issuance of preliminary injunction. — A preliminary injunction may be granted when it is
established:chanRoblesvirtualLawlibrary
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining
the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts
either for a limited period or perpetually;ChanRoblesVirtualawlibrary

(b) That the commission, continuance or non- performance of the act or acts complained of during the litigation
would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to
be done some act or acts probably in violation of the rights of the applicant respecting the subject of the action or
proceeding, and tending to render the judgment ineffectual.
chanrobleslaw
In Duvaz Corp. v. Export and Industry Bank:53chanroblesvirtuallawlibrary
Anent the first issue, the requisites for preliminary injunctive relief are: (a) the invasion of the right sought to be
protected is material and substantial; (b) the right of the plaintiff is clear and unmistakable; and (c) there is an urgent
and paramount necessity for the writ to prevent serious damage. As such, a writ of preliminary injunction may be
issued only upon clear showing of an actual existing right to be protected during the pendency of the principal
action. The twin requirements of a valid injunction are the existence of a right and its actual or threatened violation.
Thus, to be entitled to an injunctive writ, the right to be protected and the violation against that right must be shown.

In Almeida v. Court of Appeals, the Court stressed how important it is for the applicant for an injunctive writ to
establish his right thereto by competent evidence:chanRoblesvirtualLawlibrary
Thus, the petitioner, as plaintiff, was burdened to adduce testimonial and/or documentary evidence to establish her
right to the injunctive writs. It must be stressed that injunction is not designed to protect contingent or future rights,
and, as such, the possibility of irreparable damage without proof of actual existing right is no ground for an
injunction. A clear and positive right especially calling for judicial protection must be established. Injunction is not a
remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in  esse and
which may never arise, or to restrain an action which did not give rise to a cause of action. There must be an
existence of an actual right. Hence, where the plaintiffs right or title is doubtful or disputed, injunction is not proper.

. . . .

An injunctive remedy may only be resorted to when there is a pressing necessity to avoid injurious consequences
which cannot be remedied under any standard compensation. The possibility of irreparable damage without proof of
an. actual existing right would not justify injunctive relief in his favor.

. . . .
In the absence of a clear legal right, the issuance of the injunctive writ constitutes grave abuse of discretion. As the
Court had the occasion to state in Olalia v. Hizon . . . :chanRoblesvirtualLawlibrary
It has been consistently held that there is no power the exercise of which is more delicate, which requires greater
caution, deliberation and sound discretion, or more dangerous in a doubtful case, than the issuance of an injunction.
It is the strong arm of equity that should never be extended unless to cases of great injury, where courts of law
cannot afford an adequate or commensurate remedy in damages.

Every court should remember that an injunction is a limitation upon the freedom of action of the defendant and
should not be granted lightly or precipitately. It should be granted only when the court is fully satisfied that the law
permits it and the emergency demands it.54 (Emphasis supplied, citations omitted)
chanrobleslaw
Thus, an injunction must fail where there is no clear showing of both an actual right to be protected and its
threatened violation, which calls for the issuance of an injunction.

The Corporation Code provides that a stockholder has the right to inspect the records of all business transactions of
the corporation and the minutes of any meeting at reasonable hours on business days. The stockholder may demand
in writing for a copy of excerpts from these records or minutes, at his or her expense:chanRoblesvirtualLawlibrary
Title VIII
Corporate Books and Records

SECTION 74. Books to be Kept; Stock Transfer Agent. — Every corporation shall, at its principal office, keep and
carefully preserve a record of all business transactions, and minutes of all meetings of stockholders or members, or
of the board of directors or trustees, in which shall be set forth in detail the time and place of holding the meeting,
how authorized, the notice given, whether the meeting was regular or special, if special its object, those present and
absent, and every act done or ordered done at the meeting. Upon the demand of any director, trustee, stockholder or
member, the time when any director, trustee, stockholder or member entered or left the meeting must be noted in the
minutes; and on a similar demand, the yeas and nays must be taken on any motion or proposition, and a record
thereof carefully made. The protest of any director, trustee, stockholder or member on any action or proposed action
must be recorded in full on his demand.

The records of all business transactions of the corporation and the minutes of any meetings shall be open to the
inspection of any director, trustee, stockholder or member of the corporation at reasonable hours on business days
and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense.

Any officer or agent of the corporation who shall refuse to allow any director, trustee, stockholder or member of the
corporation to examine and copy excerpts from its records or minutes, in accordance with the provisions of this
Code, shall be liable to such director, trustee, stockholder or member for damages, and in addition, shall be guilty of
an offense which shall be punishable under Section 144 of this Code: Provided, That if such refusal is pursuant to a
resolution or order of the Board of Directors or Trustees, the liability under this section for such action shall be
imposed upon the directors or trustees who voted for such refusal: and Provided, further, That it shall be a defense
to any action under this section that the person demanding to examine and copy excerpts from the corporation's
records and minutes has improperly used any information secured through any prior examination of the records or
minutes of such corporation or of any other corporation, or was not acting in good faith or for a legitimate purpose
in making his demand. (Emphasis supplied)
chanrobleslaw
The right to inspect under Section 74 of the Corporation Code is subject to certain limitations. However, these
limitations are expressly provided as defenses in actions filed under Section 74. Thus, this Court has held that a
corporation's objections to the right to inspect must be raised as a defense:
2) the person demanding to examine and copy excerpts from the corporation's records and minutes has not
improperly used any information secured through any previous examination of the records of such corporation; and
3) the demand is made in good faith or for a legitimate purpose. The latter two limitations, however, must be set up
as a defense by the corporation if it is to merit judicial cognizance. As such, and in the absence of evidence, the
PCGG cannot unilaterally deny a stockholder from exercising his statutory right of inspection based on an
unsupported and naked assertion that private respondent's motive is improper or merely for curiosity or on the
ground that the stockholder is not in friendly terms with the corporation's officers. 55
chanrobleslaw
Gokongwei, Jr. v. Securities and Exchange Commission56 stresses that "impropriety of purpose .  .  . must be set up
the [sic] corporation defensively":chanRoblesvirtualLawlibrary
The stockholder's right of inspection of the corporation's books and records is based upon their ownership of the
assets and property of the corporation. It is, therefore, an incident of ownership of the corporate property, whether
this ownership or interest be termed an equitable ownership, a beneficial ownership, or a quasi-ownership. This right
is predicated upon the necessity of self-protection. It is generally held by majority of the courts that where the right
is granted by statute to the stockholder, it is given to him as such and must be exercised by him with respect to his
interest as a stockholder and for some purpose germane thereto or in the interest of the corporation. In other words,
the inspection has to be germane to the petitioner's interest as a stockholder, and has to be proper and lawful in
character and not inimical to the interest of the corporation. In Grey v. Insular Lumber, this Court held that "the
right to examine the books of the corporation must be exercised in good faith, for specific and honest purpose, and
not to gratify curiosity, or for speculative or vexatious purposes." The weight of judicial opinion appears to be, that
on application for mandamus to enforce the right, it is proper for the court to inquire into and consider the
stockholder's good faith and his purpose and motives hi seeking inspection. Thus, it was held that "the right given by
statute is not absolute and may be refused when the information is not sought in good faith or is used to the
detriment of the corporation." But the "impropriety of purpose such as will defeat enforcement must be set up the
corporation defensively if the Court is to take cognizance of it as a qualification. In other words, the specific
provisions take from the stockholder the burden of showing propriety of purpose and place upon the corporation the
burden of showing impropriety of purpose or motive." It appears to be the "general rule that stockholders are entitled
to full information as to the management of the corporation and the manner of expenditure of its funds, and to
inspection to obtain such information, especially where it appears that the company is being mismanaged or that it is
being managed for the personal benefit of officers or directors or certain of the stockholders to the exclusion of
others."57 (Emphasis supplied, citations omitted)
chanrobleslaw
Terelay Investment and Development Corp. v. Yulo 58 has held that although the corporation may deny a
stockholder's request to inspect corporate records, the corporation must show that the purpose of the shareholder is
improper by way of defense:chanRoblesvirtualLawlibrary
The right of the shareholder to inspect the books and records of the petitioner should not be made subject to the
condition of a showing of any particular dispute or of proving any mismanagement or other occasion rendering an
examination proper, but if the right is to be denied, the burden of proof is upon the corporation to show that the
purpose of the shareholder is improper, by way of defense. According to a recognized
commentator:chanRoblesvirtualLawlibrary
By early English decisions it was formerly held that there must be something more than bare suspicion of
mismanagement or fraud. There must be some particular controversy or question in which the party applying was
interested, and inspection would be granted only so far as necessary for that particular occasion. By the general rule
in the United States, however, shareholders have a right to inspect the books and papers of the corporation without
first showing any particular dispute or proving any mismanagement or other occasion rendering an examination
proper. The privilege, however, is not absolute and the corporation may show in defense that the applicant is acting
from wrongful motives.

In Guthrie v. Harkness, there was involved the right of a shareholder hi a national bank to inspect its books for the
purpose of ascertaining whether the business affairs of the bank' had been conducted according to law, and whether,
as suspected, the bank was guilty of irregularities. The court said: "The decisive weight of American authority
recognizes the right of the shareholder, for proper purposes and under reasonable regulations as to place and time, to
inspect the books of the corporation of which he is a member. . . . In issuing the writ of mandamus the court will
exercise a sound discretion and grant the right under proper safeguards to protect the interest of all concerned. The
writ should not be granted for speculative purposes or to gratify idle curiosity or to aid a blackmailer, but it may not
be denied to the stockholder who seeks the information for legitimate purposes."

Among the purposes held to justify a demand for inspection are the following: (1) To ascertain the financial
condition of the company or the propriety of dividends; (2) the value of the shares of stock for sale or investment;
(3) whether there has been mismanagement; (4) in anticipation of shareholders' meetings to obtain a mailing list of
shareholders to solicit proxies or influence voting; (5) to obtain information in aid of litigation with the corporation
or its officers as to corporate transactions. Among the improper purposes which may justify denial of the right of
inspection are: (1) Obtaining of information as to business secrets or to aid a competitor; (2) to secure business
"prospects" or investment or advertising lists; (3) to find technical defects in corporate transactions in order to bring
"strike suits" for purposes of blackmail or extortion.

In general, however, officers and directors have no legal authority to close the office doors against shareholders for
whom they are only agents, and withhold from them the right to inspect the books which furnishes the most
effective method of gaining information which the law has provided, on mere doubt or suspicion as to the motives of
the shareholder. While there is some conflict of authority, when an inspection by a shareholder is contested, the
burden is usually held to be upon the corporation to establish a probability that the applicant is attempting to gain
inspection for a purpose not connected with his interests as a shareholder, or that his purpose is otherwise improper.
The burden is not upon the petitioner to show the propriety of his examination or that the refusal by the officers or
directors was wrongful, except under statutory provisions.59 (Citations omitted)
chanrobleslaw
Among the actions that may be filed is an action for specific performance, damages, petition for mandamus, or for
violation of Section 74, in relation to Section 144 of the Corporation Code, which
provides:chanRoblesvirtualLawlibrary
SECTION 144. Violations of the Code. — Violations of any of the provisions of this Code or its amendments not
otherwise specifically penalized therein shall be punished by a fine of not less than one thousand (P1,000.00) pesos
but not more than ten thousand (P10,000.00) pesos or by imprisonment for not less than thirty (30) days but not
more than five (5) years, or both, in the discretion of the court. If the violation is committed by a corporation, the
same may, after notice and hearing, be dissolved in appropriate proceedings before the Securities and Exchange
Commission: Provided, That such dissolution shall not preclude the institution of appropriate action against the
director, trustee or officer of the corporation responsible for said violation: Provided, further, That nothing in this
section shall be construed to repeal the other causes for dissolution of a corporation provided in this Code.
chanrobleslaw
In this case, petitioner invokes its right to raise the limitations provided under Section 74 of the Corporation Code.
However, petitioner provides scant legal basis to claim this right because it does not raise the limitations as a matter
of defense. As properly appreciated by the Court of Appeals:chanRoblesvirtualLawlibrary
We agree. The act of PASAR in filing a petition for injunction with prayer for writ of preliminary injunction is
uncalled for. The petition is a pre-emptive action unjustly intended to impede and restrain the stockholders' rights. If
a stockholder demands the inspection of corporate books, the corporation could refuse to heed to such demand.
When the corporation, through its officers, denies the stockholders of such right, the latter could then go to court and
enforce their rights. It is then that the corporation could set up its defenses and the reasons for the denial of such
right. Thus, the proper remedy available for the enforcement of the right of inspection is undoubtedly the writ of
mandamus to be filed by the stockholders and not a petition for injunction filed by the corporation. 60
chanrobleslaw
Petitioner insists that the Court of Appeals erred in relying on Section 74 of the Corporation Code. It claims that
jurisprudence allows the corporation to prevent a stockholder from inspecting records containing confidential
information.61 Petitioner cites W.G Philpotts v. Philippine Manufacturing Company:62chanroblesvirtuallawlibrary
In order that the rule above stated may not be taken in too sweeping a sense, we deem it advisable to say that there
are some things which a corporation may undoubtedly keep secret, notwithstanding the right of inspection given by
law to the stockholder; as, for instance, where a corporation engaged in the business of manufacture, has acquired a
formula or process, not generally known, which has proved of utility to it in the manufacture of its products. It is not
our intention to declare that the authorities of the corporation, and more particularly the Board of Directors, might
not adopt measures for the protection of such process from publicity.63
chanrobleslaw
However, W.G Philpotts cannot support petitioner's contention since it involved a petition for mandamus where the
stockholder prayed to be allowed to exercise its right to inspect, and the respondent's objections were raised as a
defense. Nothing in W.G. Philpotts grants a corporation a cause of action to enjoin the exercise of the right of
inspection by a stockholder.

The clear provision in Section 74 of the Corporation Code is sufficient authority to conclude that an action for
injunction and, consequently, a writ of preliminary injunction filed by a corporation is generally unavailable to
prevent stockholders from exercising their right to inspection. Specifically, stockholders cannot be prevented from
gaining access to the (a) records of all business transactions of the corporation; and (b) minutes of any meeting of
stockholders or the board of directors, including their various committees and subcommittees.

The grant of legal personality to a corporation is conditioned on its compliance with certain obligations. Among
these are its fiduciary responsibilities to its stockholders. Providing stockholders with access to information is a
fundamental basis for their intelligent participation in the governance of the corporation as a business organization
that they partially own. The law is agnostic with respect to the amount of shares required. Generally, each individual
stockholder should be given reasonable access so that he or she can assess or share his or her assessment of the
management of the corporation with other stockholders. The separate legal personality of a corporation is not so
absolutely separate that it divorces itself from its responsibility to its constituent owners.

The law takes into consideration the potential disparity in the financial legal resources between the corporation and
an ordinary stockholder. The phraseology of the text of the law provides that access to the information mentioned in
Section 74 of the Corporation Code is mandatory. The presumption is that the corporation should provide access. If
it has basis for denial, then the corporation shoulders the risks of being sued and of successfully raising the proper
defenses. The corporation cannot immediately deploy its resources—part of which is owned by the requesting
stockholder—to put the owner on the defensive.

Specifically, corporations may raise their objections to the right of inspection through affirmative defense in an
ordinary civil action for specific performance or damages, or through a comment (if one is required) in a petition for
mandamus.64 The corporation or defendant or respondent still carries the burden of proving (a) that the stockholder
has improperly used information before; (b) lack of good faith; or (c) lack of legitimate purpose. 65

Good faith and a legitimate purpose are presumed. It is the duty of the corporation to allege and prove with
sufficient evidence the facts that give rise to a claim of bad faith as to the existence of an illegitimate purpose.

The confidentiality of business transactions is not a magical incantation that will defeat the request of a stockholder
to inspect the records. Although it is true that the business is entitled to the protection of its trade secrets and other
intellectual property rights, facts must be pleaded to convince the court that a specific stockholder's request for
inspection, under certain conditions, would violate the corporation's own legal right.

Furthermore, the discomfort caused to the management of a corporation when a request for inspection is claimed is
part of the regular matters that a business wanting to ensure good governance must endure. The range between
discomfort and vexation is a broad one, which may tend to be located in the personalities of those involved.

Certainly, by themselves, these are not sufficient factual basis to conclude bad faith on the part of the requesting
stockholder. Courts must be convinced that the scope or manner of the request and the conditions under which it was
made are so frivolous that the huge cost to the business will, in equity, be unfair to the other stockholders. There is
no iota of evidence that this happened here.chanroblesvirtuallawlibrary

II

The Court of Appeals did not commit an error of law in disregarding the procedure on dissolution of injunctive
writs. It lifted and cancelled the injunction via a petition for certiorari under Rule 65 of the Rules of Court based on
the grave abuse of discretion on the part of the Regional Trial Court in issuing the writ of preliminary injunction.

Petitioner invokes Rule 58, Section 6 of the Rules of Court, which provides:chanRoblesvirtualLawlibrary
SEC. 6. Grounds for Objection to, or for Motion of Dissolution of, Injunction or Restraining Order. — The
application for injunction or restraining order may be denied, upon a showing of its insufficiency. The injunction or
restraining order may also be denied, or, if granted, may be dissolved, on other grounds upon affidavits of the party
or person enjoined, which may be opposed by the applicant also by affidavits. It may further be denied, or, if
granted, may be dissolved, if it appears after hearing that although the applicant is entitled to the injunction or
restraining order, the issuance or continuance thereof, as the case may be, would cause irreparable damage to the
party or person enjoined while the applicant can be fully compensated for such damages as he may suffer, and the
former files a bond in an amount fixed by the court conditioned that he will pay all damages which the applicant
may suffer by the denial or the dissolution of the injunction or restraining order. If it appears that the extent of the
preliminary injunction or restraining order granted is too great, it may be modified.
chanrobleslaw
Petitioner assails respondents' failure to submit any affidavit or counter-bond pertaining to irreparable damage and
compensation of damages that may be suffered if the injunction is dissolved. 66

However, the injunction was lifted and cancelled via a petition for certiorari under Rule 65 of the Rules of
Court,67 not based on a motion for dissolution of the injunction. Thus, the Court of Appeals evaluated the basis for
the injunction granted by the Regional Trial Court rather than whether the injunction would cause irreparable
damage to respondents.

11. agleridge Development Corp. v. Cameron Granville 3 Asset Management, Inc., G.R. No. 204700
(Resolution), November 24, 2014

LOAN SALE PURCHASE AGREEMENT NOT

CONFIDENTIAL DOCUMENT, DOES NOT
NECESSARILY ENTAIL A TRUST
RELATIONSHIP BETWEEN THE PARTIES
Facts: 

This is for resolution wherein respondent Cameron Granville 3 Asset Management filed a motion for reconsideration
on this court (SC) over its resolution which reversed and set aside the CA’s resolution and ordered respondent to
produce the Loan Sale and Purchase agreement (LSPA) including its annexes and attachments if any, in order that
petitioners may inspect or photocopy the same. 

This motion for reconsideration raises the following points: The LSPA is privileged and confidential document

Issue: 

WON the LSPA is a privileged and confidential document

Held:

The court held that, the respondent’s invocation of the LSPA as privileged and confidential is untenable. The court
held that privileged communication under the rules of evidence is premised on an accepted need to protect a trust
relationship. It has not been shown that the parties to the deed of assignment fall under any of the foregoing
categories present in sec 24 of rule 130 if the Rules of Court. 

Further, the respondent failed to discharge the burden of showing that the LSPA is a privileged document. The
respondent failed to present and law or regulation that considers bank documents such as the LSPA as classified
information.

FACTS: Respondent Cameron filed a motion for reconsideration on the decision of SC which reversed and set aside
the Court of Appeals’ resolutions and ordered respondent to produce the Loan Sale and Purchase Agreement
(LSPA) dated April 7, 2006, including its annexes and/or attachments, if any, in order that petitioners may inspect
or photocopy the same. Petitioners Eagleridge Development Corporation, Marcelo N. Naval, and Crispin I. Oben
filed on June 7, 2013 their motion to ad.mit attached opposition. Subsequently, respondent filed its reply and
petitioners their motion to admit attached rejoinder.

The motion for reconsideration raises the following points:

(1) The motion for production was filed out of time;

(2) The production of the LSPA would violate the parol evidence rule; and

(3) The LSPA is a privileged and confidential document.

Respondent asserts that there was no “insistent refusal” on its part to present the LSPA, but that petitioners filed
their motion for production way out of time, even beyond the protracted pre-trial period from September 2005 to
2011. Hence, petitioners had no one to blame but themselves when the trial court denied their motion as it was filed
only during the trial proper.

Respondent also contends that: (1) the production of the LSPA will violate the parol evidence rule under Rule 130,
Section 9 of the Rules of Court; (2) the LSPA is a privileged/confidential bank document;and (3) under the Special
Purpose Vehicle Act, “the only obligation of both the assignor (bank) and the assignee (the SPV; respondent
Cameron) is to give notice to the debtor (Eagleridge, Naval,and Oben) that its account has been assigned/transferred
to a special purpose vehicle (Sec. 12, R.A. 9182) [and] [i]t does not require of the special purpose vehicle or the
bank to disclose all financial documents included in the assignment/sale/transfer[.]”

For their part, petitioners counter that their motion for production was not filed out of time, and “[t]here is no
proscription, under Rule 27 or any provision of the Rules of Court, from filing motions for production, beyond the
pre-trial.”

Further, assuming that there was a valid transfer of the loan obligation of petitioner EDC, Article 1634 is applicable
and, therefore, petitioners must be informed of the actual transfer price, which information may only be supplied by
the LSPA. Petitioners argue that the substitution of respondent in the case a quowas “not sufficient ‘demand’as
contemplated under Article 1634 of the Civil Code inasmuch asrespondent Cameron failed . . . to inform petitioner
EDC of the price it paid for the [transfer of the] loan obligation,” which made it “impossible for petitioners to
reimburse what was paid for the acquisition of the . . . loan obligation [of EDC].” Additionally, petitioners contend
that respondent was not a party to the deed of assignment, but Cameron Granville Asset Management (SPV-AMC),
Inc., hence, “as [to] the actual parties to the Deed of Assignment are concerned, no such demand has yet been
made.”

Petitioners add that the amount of their liability to respondent is one of the factual issues to be resolved as stated in
the November 21, 2011 pretrial order of the Regional Trial Court, which makes the LSPA clearly relevant and
material to the disposition of the case.

Petitioners next argue that the parol evidence rule is not applicable to them because they were not parties tothe deed
of assignment, and “they cannot be prevented from seeking evidence to determine the complete terms of the Deed of
Assignment.” Besides, the deed of assignment made express reference to the LSPA, hence,the latter cannot be
considered as extrinsic to it.

ISSUE: Whether or not the allowance of the production of the Loan Sale and Purchase Agreement (LSPA) would
violate the parol evidence rule in Rule 130, Section 9.

HELD: No. The parol evidence rule does not apply to petitioners who are not parties to the deed of assignment and
do not base a claim on it. Hence, they cannot be prevented from seeking evidence to determine the complete terms
of the deed of assignment.
Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second paragraph is when
the party puts in issue the validity of the written agreement, as in the case a quo.

Besides, what is forbidden under the parol evidence rule is the presentation of oral or extrinsic evidence, not those
expressly referred to in the written agreement. “[D]ocuments can be read together when one refers to the
other.”60 By the express terms of the deed of assignment, it is clear that the deed of assignment was meant to be read
in conjunction with the LSPA.

As we have stated in our decision, Rule 132, Section 17 of the Rules of Court allows a party to inquire into the
whole of the writing or record when a part of it is given in evidence by the other party. 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 inquired into by
petitioners.

Petitioners’ right to

extinguish their debt has not

yet lapsed

Petitioners’ right to extinguish their debt under Article 1634 on assignment of credits has not yet lapsed. The
pertinent provision is reproduced here:

Art. 1634. 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. A credit or other incorporeal right shall be considered in
litigation from the time the complaint concerning the same is answered.

The debtor may exercise his right within thirty days from the date the assignee demands payment from him

The LSPA is not privileged

and confidential in nature

Respondent’s contention that the LSPA is privileged and confidential is likewise untenable.

Indeed, Rule 27 contains the proviso that the documents sought to be produced and inspected must not be privileged
against disclosure. Rule 130, Section 24 describes the types of privileged communication. These are communication
between or involving the following: (a) between husband and wife; (b) between attorney and client; (c) between
physician and patient; (d) between priest and penitent; and (e) public officers and public interest.

Privileged communications under the rules of evidence is premised on an accepted need to protect a trust
relationship. It has not been shown that the parties to the deed of assignment fall under any of the foregoing
categories.

Eagleridge Development Corporation, Marcelo Naval and

Crispin Oben vs. Cameron Granville 3 Asset Management
Date November 24, 2014
DOCTRINE: Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second
paragraph is when the party puts in issue the validity of the written agreement, as in the case a quo. Besides, what is
forbidden under the parole evidence is the presentation of oral or extrinsic evidence, not those expressly referred to
in the written agreement. Documents can be read together when one refers to the other. By the express terms of the
deed of assignment, it is clear that the deed of assignment was meant to be read in conjunction with the LSPA.

FACTS
For resolution is respondent Cameron Granville 3 Asset Management, Inc.’s motion for reconsideration of our April
10, 2013 decision, which reversed and set aside the CA resolutions and ordered respondents to produce the Loan
Sale and Purchase Agreement (LSPA) dated April 7, 2006, including the annexes and/or attachments, if any, in
order that petitioners may inspect or photocopy the same.

Respondent maintains that the LSPA is immaterial or irrelevant to the case, and contends that the “order of
substitution settled the issue of respondent’s standing before the court and its right to fill in the shoes of EIB.” It
argues that the production of the LSPA will neither prevent respondent from pursuing its claim from petitioner EDC,
nor write off petitioner EDC’s liability to respondent. The primordial issue of whether petitioners owe respondent a
sum of money via the deed of assignment can allegedly “be readily resolved by application of Civil Code provisions
and/or applicable jurisprudence and not by the production/inspection of the LSPA.” Respondent also argues that “a
consideration is not always a requisite in assignment of credits, and an assignee may maintain an action based on his
title and it is immaterial whether or not he paid any consideration therefor.”

ISSUE/S
Whether or not allowing the production of the Loan Sale and Purchase Agreement would violate the parol evidence
rule?

RULING
No. The parole evidence rule does not apply to petitioners who are not parties to the deed of assignment and do not
base a claim on it. Hence, they cannot be prevented from seeking evidence to determine the complete terms of the
deed of assignment.

Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second paragraph is when
the party puts in issue the validity of the written agreement, as in the case a quo. Besides, what is forbidden under
the parole evidence is the presentation of oral or extrinsic evidence, not those expressly referred to in the written
agreement. Documents can be read together when one refers to the other. By the express terms of the deed of
assignment, it is clear that the deed of assignment was meant to be read in conjunction with the LSPA.

As we have stated in our decision, Rule 132, Section 17 of the Rules of Court allows a party to inquire into the
whole of the writing or record when a part of it is given in evidence by the other party. 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 inquired into by
petitioners.