Supena v. Delarosa
REITERATIONFacts
The Antecedents: Rodrigo B. Supena, President of BPI Agricultural Development Bank (BAID), charged Judge Rosalio G. delarosa with gross ignorance of the law for issuing an Order dated May 25, 1993, in Foreclosure Case No. 93-822. This Order held in abeyance a public auction sale scheduled for May 26, 1993, concerning a property mortgaged by PQL Realty Incorporated (PQL) to BAID. The Order was issued based on an ex-parte Motion to Hold Auction Sale in Abeyance filed by PQL. Procedural History: BAID decided to extrajudicially foreclose the mortgage on April 1, 1993, and petitioned the Ex-Officio Sheriff of Manila. A Notice of Extrajudicial Sale was issued on April 21, 1993, scheduling the auction for May 26, 1993, and was published accordingly. However, on May 23, 1993, the respondent judge issued the questioned Order based on PQL's ex-parte motion, which BAID only received on May 31, 1993. BAID averred that the order was an indefinite restraining order issued without notice, hearing, or injunction bond. The Petition: The complainant argued that the sole ground for the ex-parte motion, that the parties agreed to hold the foreclosure in Makati and not Manila, was without merit as venue for foreclosure is fixed by law and not subject to stipulation. The respondent judge, in his comment, maintained that he issued the order to determine two issues: (1) whether the venue was improperly laid based on a stipulation in the Loan Agreement providing for venue in Makati, and (2) the veracity of PQL's allegation that a P500,000.00 payment was not credited. He claimed to have acted based on fair play, equity, and substantial justice.
Issue(s)
Whether the respondent judge committed gross ignorance of the law in issuing an ex-parte order holding an extrajudicial foreclosure sale in abeyance. Whether the venue stipulation in the Loan Agreement is applicable to an extrajudicial foreclosure sale and supersedes the specific law governing such sales. Whether an ex-parte motion to hold an auction sale in abeyance is the proper remedy to question the venue or to address allegations of uncredited payments.
Ruling
The Court found the respondent judge culpable as charged and imposed a fine of P2,000.00.
Ratio Decidendi
On the issue of gross ignorance of the law and the applicability of Act No. 3135 versus the Rules of Court on venue: The Court held that the respondent judge committed gross ignorance of the law by failing to recognize that Act No. 3135, as amended, specifically governs extrajudicial foreclosure sales, not the general provisions of the Rules of Court on venue of actions. Section 2 of Act No. 3135 clearly states that the sale cannot be made outside the province where the property is situated, and if the place is stipulated, it must be in that place or the municipal building of the municipality where the property is located. Since the property was in Manila, the sale could not legally be held outside Manila. The venue stipulation in the Loan Agreement, which provided for Makati, was not applicable to the extrajudicial foreclosure sale itself, as it was not a judicial action or suit. The Court emphasized that Rule 4, Section 5 of the Rules of Court explicitly states that the rules on venue do not apply when a specific rule or law provides otherwise, which is the case with Act No. 3135. The Court stressed that when the law transgressed is elementary, the failure to know or observe it constitutes gross ignorance of the law. A judge owes it to the public and the legal profession to know the law they are supposed to apply. The respondent judge's failure to distinguish between Act No. 3135 and the Rules of Court on venue, and his misinterpretation of venue stipulations, demonstrated a deficiency in his grasp of legal principles, contrary to Canon 3, Rule 3.01 of the Code of Judicial Conduct. On the applicability and interpretation of venue stipulations: The Court reiterated the settled doctrine, originating from Polytrade Corporation v. Blanco and consistently followed in subsequent cases like Lamis Ents. v. Lagamon and Western Minolco v. Court of Appeals, that written stipulations as to venue are generally permissive and not restrictive, unless qualifying or restrictive words are present indicating exclusivity. Such stipulations do not supersede the general rules on venue but merely add an additional forum. The venue stipulation in the Loan Agreement, stating "shall be instituted in the proper Courts of Makati," was interpreted as permissive, not exclusive, and therefore did not preclude the extrajudicial foreclosure sale from being held in Manila, where the property was located, as mandated by Act No. 3135. The respondent judge's reliance on this stipulation to halt the sale demonstrated ignorance of this established jurisprudence. On the propriety of an ex-parte motion to hold an auction sale in abeyance and the allegation of uncredited payment: The Court found that even if the venue stipulation were relevant, the respondent judge erred in issuing an indefinite restraining order based on a mere ex-parte motion. The proper recourse for PQL to question the venue or to address its allegations regarding the P500,000.00 payment would have been to file a proper court action seeking a temporary restraining order and/or injunction. The ex-parte motion was an improper remedy and an attempt to shortcut the legal process, which the respondent judge unfortunately fell prey to. This further underscored his lack of knowledge of the proper legal procedures. The Court dismissed the respondent judge's justification that he issued the order to determine the truthfulness of the P500,000.00 payment allegation. This matter should have been addressed through a proper court action for injunctive relief, not through an ex-parte order halting an extrajudicial foreclosure sale. The respondent judge's reliance on this flimsy argument further convinced the Court of his culpability.
Main Doctrine
A judge commits gross ignorance of the law when they issue an order holding an extrajudicial foreclosure sale in abeyance based on an ex-parte motion and inapplicable provisions of the Rules of Court, instead of the specific law governing extrajudicial foreclosures (Act No. 3135).