China Banking Corporation v. Zuñiga

G.R. No. 141923 · 2002-09-17 · J. QUISUMBING, J.: · Remedial Law

REITERATION

Facts

The Antecedents: Thelma M. Zuñiga mortgaged her residential property at 141 Apitong St., New Alabang Village, Muntinlupa City, covered by TCT No. 200427, to China Banking Corporation (Chinabank) to secure a loan of P4,024,396.25. Facing financial difficulties, Zuñiga requested an extension to settle her obligations and demonstrated good faith by paying P1,000,000 on April 23, 1997, followed by issuing two postdated FEBTC checks each for P500,000 on June 23, 1997. Chinabank claimed it returned the checks, but Zuñiga denied this; she later closed her FEBTC account in August 1997 to prevent encashment. On July 2, 1997, Chinabank denied further extension and demanded immediate full settlement including interest, penalties, and charges. On August 18, 1997, Chinabank initiated extrajudicial foreclosure under Act No. 3135, bidding P8,583,123.27 as highest bidder at the sale. Procedural History: On October 10, 1997, Zuñiga filed Civil Case No. 97-204 before RTC Muntinlupa, Branch 276, presided by Judge Norma C. Perello, seeking annulment of the foreclosure sale, preliminary injunction, and TRO; Judge Perello issued a TRO then a writ of preliminary injunction against Chinabank and its officers (Peter S. Dee, Alex O. Lim, Atty. Omar D. Vigilia, Melvin T. Bagabaldo). Chinabank filed CA-G.R. SP No. 46708, which on June 29, 1998, annulled the injunction; SC Resolution dated November 18, 1998 (received by RTC November 27, 1998), denied Zuñiga's appeal and affirmed, holding no clear right to injunction as payments were insufficient (only P1M cash, checks unencashed). Post-resolution, pre-trial set June 9, 1999; Chinabank's counsel appeared via SPA but lacked supporting corporate secretary's memorandum, prompting Zuñiga's motion to declare default for absence of Board resolution; Judge Perello granted on June 9, 1999, set ex parte hearing June 30, 1999. Chinabank moved for reconsideration June 10 and inhibition June 14 (denied June 28); filed CA-G.R. SP No. 54905 on August 23, 1999; CA TRO September 24, 1999 (received RTC September 28), enjoining decision in Civil Case No. 97-204. Same day, Judge Perello promulgated decision annulling foreclosure, ordering Zuñiga to pay P4,862,621.63 within 90 days, Chinabank to reconvey title, pay P500K attorney's fees, costs, moral damages; mailed November 17, 1999. CA decision October 29, 1999, nullified default and ex parte submission only as to Chinabank, affirmed inhibition denial. Judge Perello denied Chinabank's MR on February 3, 2000 (62 days after submission December 3, 1999). The Petition: Petitioners filed G.R. No. 141923 on March 2, 2000, seeking certiorari annulment of RTC decision September 24, 1999, and order February 3, 2000, alleging grave abuse: (I) defiance of CA TRO September 24, 1999; (II) disregard of CA decision October 29, 1999 nullifying default; (III) disobedience to CA and SC final resolutions; (IV) nullity of assailed issuances.

Issue(s)

Whether respondent judge committed grave abuse of discretion in promulgating the September 24, 1999 decision despite the Court of Appeals' TRO of the same date enjoining such act, and in denying the motion for reconsideration via the February 3, 2000 order despite the CA's October 29, 1999 decision nullifying the default order; Whether the respondent judge's delay in resolving the motion for reconsideration constitutes gross inefficiency.

Ruling

The petition is GRANTED. The decision of respondent Judge Norma C. Perello dated September 24, 1999, and the order dated February 3, 2000, in Civil Case No. 97-204, are ANNULLED. No pronouncement as to costs.

Ratio Decidendi

On the Grave Abuse via Defiance of CA TRO and Delayed Promulgation: Respondent judge committed grave abuse of discretion amounting to excess of jurisdiction under Rule 65, Sec. 1, Rules of Court, by issuing a decision on the merits in favor of Zuñiga—annulling foreclosure, ordering payment of P4,862,621.63, reconveyance of title, and damages—despite actual receipt of the CA TRO on September 28, 1999 (stamped 10:10 AM, personally served), which explicitly enjoined 'rendering and promulgating any Decision in Civil Case No. 97-204' to preserve status quo pending certiorari and injunction resolution. The decision's mailing to parties only on November 17, 1999—nearly two months post-purported date—rebuts presumption of regularity, suggesting antedating to preempt CA intervention, as defying belief that a losing party's copy would be delayed so long. Even assuming September 24 promulgation, judge should have granted petitioners' MR filed October 1999, considering the TRO and CA decision nullifying default against Chinabank, abbreviating proceedings per judicial efficiency. This defiance undermines appellate jurisdiction, rendering it nugatory if lower courts disobey with impunity, as held in Villaflor v. Amatong (344 SCRA 570, 580). The SC's November 18, 1998 Resolution (finding no clear right to enjoin foreclosure due to unencashed checks and mere P1M payment) bound the RTC, prohibiting contrary findings via technical default. Procedural due process was violated by ex parte evidence reception without resolving petitioners' June 10, 1999 MR set for hearing June 18, before June 30 ex parte date, sans grounds—depriving petitioners of opportunity to contest, per CA's October 29, 1999 ruling. On Undue Delay and Judicial Inefficiency: The February 3, 2000 denial of MR, 62 days after submission December 3, 1999, exceeded the 30-day reglementary period under Rule 30, Sec. 3, constituting gross inefficiency akin to Bascug v. Judge Arinday (A.M. No. RTJ-00-1591, April 11, 2002), eroding public confidence. Judges must resolve motions with dispatch to sustain faith in judiciary; delay here compounded grave abuse by ignoring CA nullification of default and ex parte order as to Chinabank, perpetuating invalid proceedings.

Main Doctrine

A trial court judge exercises grave abuse of discretion when issuing a decision in direct defiance of a temporary restraining order (TRO) from the Court of Appeals that explicitly enjoins the rendering and promulgation of any decision in the case, as this constitutes contempt of higher court authority and undermines the judicial hierarchy. The presumption of regularity in judicial acts is rebutted by irregularities such as mailing the decision nearly two months after its purported date, following receipt of the TRO, raising suspicions of antedating to preempt appellate intervention. Procedural due process mandates resolution of a pending motion for reconsideration before proceeding to ex parte reception of evidence or submission for decision, and failure to do so with stated grounds invalidates subsequent orders. Inferior courts must defer to and cannot contradict findings of higher courts, such as the Supreme Court's resolution affirming no clear right to enjoin foreclosure due to insufficient payments. Undue delay in resolving motions beyond the reglementary 30-day period constitutes gross inefficiency, eroding public faith in the judiciary.