FIRST DIVISION

[G.R. No. L-1716. June 28, 1949.]

MATERIAL DISTRIBUTORS (PHIL.), INC. and HARRY LYONS ,

petitioners, vs . FELIPE NATIVIDAD, Judge of First Instance of Manila,
and LOPE SARREAL , respondents.

Gibbs, Gibbs, Chuidian & Quasha for petitioners.

Claro M. Recto for respondent Lope Sarreal.
No appearance for respondent Judge.

SYLLABUS

1. PLEADING AND PRACTICE; PRODUCTION AND INSPECTION OF

DOCUMENTS AND BOOKS, CANNOT BE IDENTIFIED OR CONFUSED WITH
UNREASONABLE SEARCHERS; RULE 21 OF RULES OF COURT INTERPRETED. — The
orders in question, issued in virtue of the provisions of Rule 21, pertain to a civil
procedure that cannot be identi ed or confused with the unreasonable searches
prohibited by the Constitution. But in the erroneous hypothesis that the production and
inspection of books and documents in question is tantamount to a search warrant, the
procedure outlined by Rule 21 and followed by respondent judge place them outside
the realm of the prohibited unreasonable searches. There is no question that, upon the
pleadings in the case, S has an interest in the books and documents in question, that
they are material and important to the issues between him and petitioners, that justice
will be better served if all the facts pertinent to the controversy are placed before the
trial court.
2. CONSTITUTIONAL LAW; GUARANTY OF PRIVACY OF COMMUNICATION
AND CORRESPONDENCE. — The constitutional guarantee of privacy of communication
and correspondence will not be violated, because the trial court has power and
jurisdiction to issue the order for the production and inspection of the books and
documents in question in virtue of the constitutional guarantee making an express
exception in favor of the disclosure of communication and correspondence upon lawful
order of a court of justice.

DECISION

PERFECTO , J : p

On March 24, 1947, Lope Sarreal led a complaint (amended on April 10, 1947,
to include Harry Lyons) seeking a money judgment against petitioners on three causes
of action in the total of P1,256,229.30.

On May 27, 1947, Sarreal led a motion for the production and inspection of the
following documents:
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 "I. Books or Papers of Material Distributors (Phil.) Inc.:
"1. Cash Receipts Journal
"2. Cash Payments Journal
"3. All Individual Ledgers, specially of the following persons or
entities.
"(a) British-American Engineering Corporation
"(b) Philippine Refinery
"(c) Felipe Buencamino
"(d) Luzon Stevedoring
"(e) Standard Oil Company of New York
"(f ) Philippine Exchange Co., Inc.
"(g) Manila Laundry Company
"(h) Filipino Businessmen's Syndicate
"(j) Harry Lyons.
"4. All letters exchanged between Material Distributors (Phil.)
Inc., Material Distributors, Inc. of Wichita, Kansas and Barry Lyons,
between October 9, 1946 and March 31, 1947.
"5. All cablegrams exchanged between Material Distributors
(Phil.), Inc., and Material Distributors, Inc., Wichita, Kansas, between
October 9, 1946 to March 31, 1947.
"II. Books and Papers of the defendant Harry Lyons.
"1. Letters exchanged between Barry Lyons and Material
Distributors, Inc., Wichita, Kansas between September 14, 1946 and March
24, 1947.
"2. Cablegrams exchanged between Harry Lyons and Material
Distributors, Inc., Wichita, Kansas, between September 14, 1946 and March
24, 1947.
"3. Cash Receipts Journal. "4. Cash Payments Journal."
On June 4, 1947, Sarreal led a supplemental motion for the production and
inspection of the originals of Annexes A and B of the complaint.
On June 12, 1947, petitioners led a memorandum and opposition to Sarreal's
above mentioned original and supplemental motions on the ground that he failed to
show good cause and that the motions were evidently led for the purpose of shing
evidence.
On July 16, 1947, respondent judge, granting both motions, required petitioners
to produce the documents and annexes in question on July 24, 1947.
On account of the absence in the Philippines of Harry Lyons, petitioners moved,
reserving whatever rights they have under the Rules of Court, to postpone the
inspection of the documents and annexes in question and accordingly respondent
judge postponed it to August 15, 1947.
On August 13, 1947, petitioners moved for the reconsideration of the order of
July 16, on the following grounds:
"(a) Article 46 of the Code of Commerce which prohibits the delivery,
communication and general examination of the correspondence of merchants, a
substantial right, as well as the petitioners' right to the inviolability of their
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 correspondence as guaranteed by the Constitution would be violated by the order
requiring the production of the following documents:
"BOOKS AND PAPERS OF DEFENDANT HARRY LYONS.
"(1) Letters exchanged between Harry Lyons and Material Distributors,
Inc., of Wichita, Kansas, between September 14, 1946 and March 24, 1947;
"(2) Cablegrams exchanged between Harry Lyons and Material
Distributors, Inc., of Witchita, Kansas, between September 14, 1946 and March 24,
1947.
"BOOKS AND PAPERS OF MATERIAL DISTRIBUTORS (PHIL.) INC.
"(4-5) All letters and cablegrams exchanged between Material
Distributors (Phil.), Inc., Material Distributors, Inc., of Wichita, Kansas, and Harry
Lyons between October 9, 1946 and March 31, 1947.
"(b ) That the production for plaintiff's inspection of all the foregoing
documents above enumerated, as well as of the following documents, would constitute
a ' shing expedition,' not allowed by Rule 21 of the Rules of Court, since their materiality
or probable materiality is not shown by the pleadings of the parties except by movant's
bare allegations which are disputed by your petitioners:
"BOOKS AND PAPERS OF MATERIAL DISTRIBUTOR'S (PHIL.) INC.
"1-2. Cash Receipts Journal and Cash Payments Journal.
"3. All individual Ledgers, specially of the following persons or entities.
"(b) Philippine Refinery.
"(c) Felipe Buencamino.
"(d) Luzon Stevedoring.
"(e) Standard Oil Company of New York.
"(f ) Philippine Exchange Co., Inc.
"(g) Manila Laundry Company.
"(c) That plaintiff is not entitled to the production and inspection of the
originals of Annexes A and B because his only purpose, as stated in his supplemental
motion, Exhibit D, was to nd out if a case of falsi cation has been made; that the issue
between the parties in this regard is material only to your petitioners' a rmative
defense, and that if plaintiff's purpose was as stated in said supplemental motion, then
your petitioners claimed their privilege against self-incrimination. That this latter
privilege was also claimed insofar as the production and inspection of the other
documents were concerned by your petitioners in view of counsel for respondent Lope
Sarreal's charge to the Honorable City Fiscal for the City of Manila that your petitioners
were violating our Corporation Law."
On September 27, 1947, respondent judge denied the motion for
reconsideration.
Petitioners impugn the validity of the orders of July 16 and September 27, 1947,
as were issued by the respondent judge in excess of his jurisdiction or with grave abuse
of his discretion, and prayed for the annulment or modi cation of the order of July 16,
1947.
Respondent Sarreal advanced the following reasons to show that the orders
complained of were not issued in excess of the trial court's jurisdiction or with grave
abuse of discretion:
"(a) The motions of the respondent Lope Sarreal of May 27, 1947 and
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 June 4, 1947 contain allegations of the ultimate fact that the books and papers
mentioned in said motions constitute or contain evidence material to the matters
involved in the case and are in the possession, custody or control of the
petitioners herein, and allegation to this effect is adequate showing of good
cause for the production and inspection of the documents mentioned therein,
being an allegation in the very words used in Form 11 of the Appendix Forms of
our Rules of Court, and therefore a su cient compliance with said Rule (Go
Tianco vs. Judge Diaz, G.R. L-7, January 22, 1946, reported in the June 1946
issue of the Official Gazette).
"(b) Article 46 of the Code of Commerce invoked by the petitioners
does not apply to cases of production and inspection of books and papers
belonging to a party to the action in which such production and inspection are
sought (Decision of Supreme Court of Spain of March 30, 1894). At any rate, said
Article of the Code of Commerce has been impliedly repealed by Act No. 190,
pertinent portions of which are now embodied in our Rules of Court (3 Op. of Atty.
Gen., 380).
"(c) Neither would the inspection of books and papers of the
petitioners amount to a violation of the inviolability of correspondence under Sec.
1, No. 5, Article III of the Constitution of the Philippines, considering that the
inspection of said books and papers are sought through proper order of the trial
court, and the Constitutional provision invoked by the petitioners precisely allows
inspection of communication and correspondence upon lawful order of the court.
Moreover, this provision of our Constitution creates no new right, being merely a
re-enforcement of the Constitutional prohibition against unreasonable searches
and seizures (Sinco, Philippine Government and Political Law, 4th Edition, p. 632),
and when the inspection of such books and papers was allowed 'upon lawful
order of the court' made through the respondent Judge, such inspection cannot be
considered as unreasonable altho such books and papers are private in character
(First National Bank vs. Hughes, 6 Fed., C 737, 741, appeal dismissed for want of
jurisdiction in 106 U. S., 523, 27 Law ed., 268, 1 Sup. Ct. Rep., 489; Johnson Steel
Street Rail Co. vs. North Branch Steel Co., 48 Fed., 191; Victor G. Beede Co. vs.
Joseph Bancroft & Sons Co., 98 Fed., 175, a rmed in 52 L.R.A., 734, 45 C.C.A.,
354, 106 Fed., 396, where this question was not involved; Burnham vs. Morrissey,
14 Gray, 226, 74 Am. Dec., 676; United States vs. Terminal R. Assoc., 148 Fed.,
486; Re Dunn, 9 Mo. App., 255; Elder vs. Bogardus, 1 Edm. Sel Cas., 110; Boston &
M.R. Co. vs. States [N. H.], 77 Atl., 996; Hopkinson vs. Burghley, L. R. 2ch., 447;
Groker- Wheeler Co. vs. Bullock [C. C.], 134 Fed., 241; Re Bolster, 110 Pac., 547).
"(d) The inspection of said documents is not for the purpose of 'fishing
evidence' but with a view to enabling the respondent Lope Sarreal to designate
with particularity in the subpoena duces tecum to be obtained in connection with
the trial of the case on its merits the speci c books and papers containing the
entry of receipts and payments made by the petitioners, such books and papers
being material to the case in view, among others, of the allegations in the
amended complaint that the defendants, the petitioners herein, had been remitting
all or the greater volume of the proceeds from the sales of equipments and
materials of the defendants in Civil Case No. 2059 outside the jurisdiction of the
trial court and had been disposing of their properties with the intention of
defrauding their creditors. At any rate, ' shing expedition' is allowed and is
precisely contemplated in Rule 21 of our Rules of Court as a weapon of discovery
(XXVI Am. Bar. Ass. Jur. No. 1, Jan. 1940, 48; Golden vs. Arcadia Mutual Casualty
Company, D. C. Ill., 1942, 3 F. R. D., 26; Leach vs. Griff Bros. Coop. Corp., D. C.
Miss., 1942 2 F. R. D., 444; Civil Aeronautics Board of Aeronautic Authority vs.
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 Canadian Colonial Airways, D. C., 1941, 41 F. S., 1006; Quemus Theatre Co. vs.
Warner Bros. Pictures, D. C. N. J., 1940, 35 F. S., 949; United Mercantile Agency vs.
Silver Fleet Motor Express, D. C. Ky., 1941, 1 F. R. D., 709; Walling vs. Richmon
Screw Anchor Company, D. C. N. Y., 1943, 4 F. R. D., 265; Monarch Liquor Corp.
vs. Schenley Distillers Corp., D. C. N. Y., 1941, 2 F. R. D., 51; Walsh vs. Comm.
Mutual Life Insurance Company of Hartford, Conn. [1939], 26 F. Supp., 556; Olson
Transportation Company vs. Socony Vacuum Oil Company, 7 F. R. D., 234).
"(e) The originals of Annexes A and B are relevant not only to the case
of the defendants but also to that of the plaintiff in Civil Case No. 2059 here
involved, in view of the issue of fact raised by the pleadings of the parties as to
whether the originals of Annexes A and B have been falsi ed by the insertion
therein of the names of Gil J. Puyat and Raymond Lehmann after said Annexes
were signed by respondent Lope Sarreal and delivered to the petitioner Harry
Lyons, in view of which respondent Lope Sarreal is entitled to the production and
inspection thereof under the provisions of Rule 21 of our Rules of Court.
"(f ) Even if ocular inspection of said Annexes A and B may reveal
falsi cation thereof by the petitioners amounting to a violation of the applicable
provisions of our Revised Penal Code, the petitioners cannot exempt themselves
from the production of said exhibits for mere inspection and copying, inasmuch
as the Constitutional prohibition against self-incrimination has been extended in
speci c cases only to the production of documents as evidence, and only when
the person producing them is made to take the witness stand and identify them
under oath, and not to the production of such documents for mere inspection
(Comm. vs. Southern Express Co., 1914, 160 Ky., 1, 169 SW., 517, annotated
cases 1916A, 373, L. R. A., 1915B, 913; U. S. vs. Hughes, 12 Blatchff, 553); the
reason being that the Constitutional prohibition is one against compelling a
person to be a 'witness against himself', and this has been held to mean
testimonial compulsion or extraction of admission from the person's own lips (4
Wigmore, 865, 2263; Wilson vs. U. S., 55 Law. ed., 776, citing cases).
"(g) Moreover, the corporate records sought to be inspected are not
covered by the Constitutional prohibition against self- incrimination, even though
such documents may contain evidence tending to subject any or all of the
o cers of a corporation to a criminal indictment (Wilson vs. U. S., 221 U. S., 361,
51 Law. ed., 771; Oklahoma Press Pub. Co. vs. Walling, 327 U. S., 186, 90 Law.
ed., 614, 627-629; U. S. vs. Baunch & Lamp Optical Co., 321 U. S., 707, 88 Law. ed.,
1024, 1037 [1944]; U. S. vs. White, 38 Law. ed., 1547).
"(h) Production and inspection of documents have been allowed and
sustained in decided cases, under Orders which were broader than those here
assailed, for the production and inspection of all books of accounts, all
memoranda and records, stock book, ledger, journal, cash book, bank book, bank
deposit slip, check book, voucher, contract, income tax return, booking record and
correspondence (U. S. vs. Duodera, 1 F. R. S., 466, U. S. D. C. June 16, 1939;
Orange Country Theater Corp. vs. League, 1 F. R. S., 448).
"(i) The respondent Judge, before issuing the Orders complained of,
gave the parties full opportunity, not only to discuss the question involved by
repeated oral arguments but also by written memoranda, and in the exercise of
his discretion issued the Orders complained of only after full consideration of all
the questions of fact and law involved."
The production and inspection of documents and books here in question call for
the interpretation and application of section 1 of Rule 21, which reads as follows:
"SECTION 1. Motion for production or inspection; order. — Upon motion
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 of any party showing good cause therefor and upon notice to all other parties, the
court in which an action is pending may (a) order any party to produce and permit
the inspection and copying or photographing, by or on behalf of the moving party,
of any designated documents, papers, books, accounts, letters, photographs,
objects or tangible things, not privileged, which constitute or contain evidence
material to any matter involved in the action and which are in his possession,
custody or control; or (b) order any party to permit entry upon designated land or
other property in his possession or control for the purpose of inspecting,
measuring, surveying, or photographing the property or any designated relevant
object or operation thereon. The order shall specify the time, place and manner of
making the inspection and taking copies and photographs, and may prescribe
such terms and conditions as are just."
Petitioners contend that in ling his original and supplemental motions, Sarreal
has failed to show good cause for the issuance of the requested order. It appears,
however, in the original motion of May 27, 1947, that the books and papers therein
mentioned "constitute or contain the evidence material to the matters involved in the
above entitled case."
In the supplemental motion of June 4, 1947, it is alleged that there is direct
con ict between the allegations of the complaint and amended complaint and those of
the answer and amended answer as to whether or not the names of Gil J. Puyat and
Raymond W. Lehmann appear in any part of the originals of Annexes A and B of the
complaint, and plaintiff Sarreal wanted the production and inspection of said originals
to show that they did not contain the names of Gil J. Puyat and Raymond W. Lehmann,
and that if said names should appear now typed in said Annexes A and B, said
additional names must have been typed by direction of Harry Lyons without the
knowledge or consent of Sarreal and after said originals were delivered by Harry Lyons
and filed by the latter and that the changes so introduced are a forgery.
With these allegations in the original and supplemental motions Sarreal has
ful lled the requirement of showing good cause for the production and inspection of
the books and documents in question under Rule 21.
Petitioners contend that the order of the trial judge violated petitioners'
constitutional right against self-incrimination.
We have considered carefully the reasons advanced by petitioners in their
pleadings and memoranda in support of this allegation and we found nothing in them to
show how, without the inspection of Annexes A and B of the complaint, petitioners may
incriminate themselves. We have, therefore, to dismiss such contention.
Petitioners contend that the orders complained of trampled upon petitioners'
right to the inviolability of the correspondence and communication as guaranteed by
the following provisions of the Constitution:
"(3) The right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and seisures shall not be
violated, and no warrants shall issue but upon probable cause, to be determined
by the judge after examination under oath or a rmation of the complainant and
the witnesses he may produce, and particularly describing the place to be
searched, and the persons or things to be seized." (Sec. 1, Art. III, Constitution of
the Philippines.)
"(5) The privacy of communication and correspondence shall be
inviolable except upon lawful order of the court or when public safety and order
require otherwise." (Sec. 1, Art. III, Constitution of the Philippines.)
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 The orders in question, issued in virtue of the provisions of Rule 21, pertain to a
civil procedure that cannot be identi ed or confused with the unreasonable searches
prohibited by the Constitution. But in the erroneous hypothesis that the production and
inspection of books and documents in question is tantamount to a search warrant, the
procedure outlined by Rule 21 and followed by respondent judge place them outside
the realm of the prohibited unreasonable searches. There is no question that, upon the
pleadings in the case, Sarreal has an interest in the books and documents in question,
that they are material and important to the issues between him and petitioners, that
justice will be better served if all the facts pertinent to the controversy are placed
before the trial court.
The constitutional guarantee of privacy of communication and correspondence
will not be violated, because the trial court has power and jurisdiction to issue the order
for the production and inspection of the books and documents in question in virtue of
the constitutional guarantee making an express exception in favor of the disclosure of
communication and correspondence upon lawful order of a court of justice.
After a careful consideration of the legal questions raised by petitioners, this
Court has arrived at the conclusion that the trial judge, in issuing the order of July 16,
1947, has not exceeded his jurisdiction or acted with grave abuse of discretion.
Petition denied with costs against petitioner.
Moran, C.J., Paras, Feria, Tuason, Montemayor and Reyes, JJ., concur.

Separate Opinions
MORAN , C.J.:

Mr. Justice Pablo voted for this decision.

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