Balutan vs. Villarosa

A judge commits gross ignorance of the law, gross misconduct, and grave abuse of authority when he resolves a case on the merits and issues a permanent injunction and writ of execution despite a Supreme Court temporary restraining order, thereby rendering the TRO nugatory; such conduct is a serious charge under Rule 140 and, where dismissal is barred by supervening retirement, warrants a fine of PHP 200,000.00, forfeiture of retirement benefits except accrued leave credits, and disqualification from public office.

Alexander F. Balutan was the General Manager of the Philippine Charity Sweepstakes Office (PCSO). TMA Group of Companies Pty. Ltd. and TMA Group Philippines, Inc. entered into a Contractual Joint Venture Agreement with PCSO on December 4, 2009 for the establishment of a thermal coating plant to produce PCSO lotto tickets, with PCSO committing to buy its lotto tickets exclusively from the plant and making no investment except that commitment. The Office of the Government Corporate Counsel later opined that the CJVA was void because its purpose went beyond PCSO's primary corporate purpose, mandate, or charter. The dispute over the CJVA's implementation led to Civil Case No. 11-310 and, ultimately, to Balutan's administrative complaint against Judge Joselito C. Villarosa, the presiding judge of Branch 66, RTC Makati City.

On December 4, 2009, TMA Group of Companies Pty. Ltd. (TMA Australia) and TMA Group Philippines, Inc. (TMA Philippines), collectively TMA et al., entered into a Contractual Joint Venture Agreement (CJVA) with the Philippine Charity Sweepstakes Office (PCSO) for the establishment of the first thermal coating plant in the Philippines for the production of PCSO lotto tickets. PCSO would have no investment in the project except its commitment to buy its lotto tickets exclusively from the plant. By Resolution dated August 20, 2010, the PCSO Board of Directors suspended the implementation of the CJVA pending review by the Office of the Government Corporate Counsel (OGCC). The OGCC eventually opined that the CJVA was void because the purpose for which it was constituted went beyond the primary corporate purpose, mandate, or charter of PCSO. TMA et al. thereafter demanded that the CJVA be implemented, but to no avail. On April 8, 2011, TMA et al. filed with the Regional Trial Court (RTC) of Makati City a Complaint for Specific Performance and Mandatory and Prohibitory Injunction, with prayer for a temporary restraining order (TRO) and/or preliminary injunction, docketed as Civil Case No. 11-310 and raffled to Branch 39 presided by Judge Winlove M. Dumayas.

By Order dated May 13, 2011, Judge Dumayas granted TMA et al.'s prayer for a writ of preliminary mandatory and prohibitory injunction directing PCSO, its agents, or anyone acting on its behalf to desist from committing acts that would result in the cancellation of the CJVA, including the conduct of any bidding for PCSO's lotto paper requirements. A writ of preliminary mandatory and prohibitory injunction was issued on May 16, 2011. PCSO's motion to quash was denied in an Order dated September 4, 2013. PCSO assailed these orders before the Court of Appeals (CA) via a petition for certiorari and prohibition docketed as CA-G.R. SP No. 132655. By Decision dated March 27, 2014, the CA denied the petition and upheld the injunctive writ. PCSO then filed a petition for review on certiorari with the Supreme Court, docketed as G.R. No. 212143.

On October 11, 2013, following the issuance of the writ of preliminary mandatory and prohibitory injunction, TMA et al. filed an extremely urgent omnibus motion to direct PCSO to issue purchase orders for their lottery consumables nationwide. In his Order dated November 6, 2013, Judge Dumayas granted the motion and directed TMA et al. to deliver a specific volume of lotto papers to PCSO. PCSO sought reconsideration, and during its pendency, Judge Dumayas issued an Order dated November 25, 2013 directing TMA et al. to suspend compliance with the November 6, 2013 Order, but TMA et al. still proceeded to deliver the lotto papers to PCSO's warehouse. On April 30, 2014, TMA et al. filed a motion for execution of the November 6, 2013 Order for payment of the deliveries amounting to PHP 82,000,000.00 (1st Motion for Execution). In the interim, Judge Dumayas voluntarily inhibited and Civil Case No. 11-310 was re-raffled to Branch 133, RTC Makati, presided by Judge Elpidio R. Calis. In his Order dated June 11, 2014, Judge Calis granted TMA et al.'s 1st Motion for Execution. PCSO challenged this through a petition for certiorari docketed as CA-G.R. SP 137528. During its pendency, TMA filed another motion for execution for Branch 133 to direct PCSO to pay them PHP 178,000,000.00 for subsequent deliveries (2nd Motion for Execution). Judge Calis deferred action thereon following referral of the case to mediation and judicial dispute resolution. Mediation failed, and the case was raffled to Branch 66, RTC Makati City, presided by Judge Villarosa. Meanwhile, on October 20, 2014, the Supreme Court in G.R. No. 212143 issued a TRO against the implementation of the November 6, 2013 Order pertaining to the 1st Motion for Execution. On the basis thereof, PCSO argued that during the effectivity of the TRO, TMA et al.'s 2nd Motion for Execution could not be granted. In CA-G.R. SP 137528, the CA rendered a Decision dated February 4, 2016 dismissing PCSO's petition for certiorari assailing the grant of the 1st Motion for Execution. PCSO once again came to the Supreme Court via another petition for review on certiorari docketed as G.R. No. 225457, which was subsequently consolidated with G.R. No. 212143.

After the transfer of Civil Case No. 11-310 to Judge Villarosa, TMA et al. filed an extremely urgent manifestation and motion dated February 26, 2016, seeking to direct PCSO to make TMA et al. the exclusive source of its lottery and gaming consumables, thus barring as possible sources the National Printing Office and other entities. Judge Villarosa granted the motion in his Order dated May 18, 2016. After PCSO's motion for reconsideration was denied, it went back to the CA through a petition for certiorari docketed as CA-G.R. No. 148828; the records do not show the current status of that case. Meanwhile, TMA et al. filed a motion for summary judgment dated August 3, 2017, which Judge Villarosa granted in his Decision dated December 5, 2017 (Summary Judgment). He ruled that the previous writ of preliminary injunction orders were already substituted by the writ of permanent mandatory and prohibitory injunction borne in his Summary Judgment. Taking off from the Summary Judgment, on December 12, 2017, TMA et al. filed a motion for its execution. In his January 18, 2018 Order, Judge Villarosa granted the motion and directed the sheriff to execute the monies, properties, and other assets of PCSO amounting to PHP 707,223,555.44 (writ of execution of the Summary Judgment). PCSO consequently moved to quash the writ of execution. PCSO likewise filed with the Supreme Court another petition for certiorari with urgent prayer for issuance of a TRO against the writ of execution of the Summary Judgment, docketed as G.R. No. 236888, and consolidated with G.R. No. 212143.

In its Decision dated August 28, 2019 in G.R. Nos. 212143, 225457, and 236888, the Supreme Court invalidated the January 18, 2018 Order of Judge Villarosa granting the motion for issuance of the writ of execution of the Summary Judgment. The Court granted the petitions, reversed and set aside the CA decisions, declared void the orders dated May 13, 2011, September 4, 2013, November 6, 2013, June 11, 2014, and August 12, 2014, annulled and set aside the January 18, 2018 Order, and ordered TMA et al. to return the amount of PHP 707,223,555.44 representing the amount garnished under the January 18, 2018 Order. Against this factual backdrop, Balutan, in his capacity as General Manager of PCSO, filed a Verified Complaint dated February 12, 2018 against Judge Villarosa, charging him with gross ignorance of the law, grave abuse of authority, gross neglect of duty, and willful violation of the New Code of Judicial Conduct. According to complainant, Judge Villarosa gravely abused his discretion when he ordained that the ancillary writ of preliminary mandatory and prohibitory injunction issued by Judge Dumayas was already substituted by the writ of permanent mandatory and prohibitory injunction he issued as part of his Summary Judgment; thus, by extension, the issuance of the writ of execution of the Summary Judgment was devoid of factual and legal basis. Complainant further alleged that Judge Villarosa's reliance on the CA decision in CA-G.R. SP No. 132655 upholding the writ of preliminary mandatory and prohibitory injunction constituted gross ignorance of the law because the issue of its validity was then still pending with the Supreme Court, which eventually reversed it.

In his Comment dated March 22, 2018, Judge Villarosa asserted that the administrative complaint was premature and should be dismissed since the petitions for review brought before the Supreme Court had not been resolved as yet. He argued that even if his orders were ultimately set aside, only a mere error of judgment could be imputed to him.

• Substitution of Injunctive Writs: Balutan argued that Judge Villarosa gravely abused his discretion in holding that the ancillary writ of preliminary mandatory and prohibitory injunction issued by Judge Dumayas was already substituted by the writ of permanent mandatory and prohibitory injunction in the Summary Judgment, rendering the writ of execution devoid of factual and legal basis.
• Pending Validity of the Injunction: Balutan maintained that Judge Villarosa's reliance on the CA decision in CA-G.R. SP No. 132655 upholding the preliminary injunction constituted gross ignorance of the law because the validity of that injunction was still pending before the Supreme Court, which eventually reversed it.
• Administrative Charges: Balutan charged Judge Villarosa with gross ignorance of the law, grave abuse of authority, gross neglect of duty, and willful violation of the New Code of Judicial Conduct.

• Prematurity: Judge Villarosa asserted that the administrative complaint was premature and should be dismissed because the petitions for review before the Supreme Court had not yet been resolved.
• Mere Error of Judgment: He argued that even if his orders were ultimately set aside, only a mere error of judgment could be imputed to him.

• Gross Ignorance of the Law: Whether Judge Villarosa is administratively liable for gross ignorance of the law for granting summary judgment, issuing a permanent mandatory and prohibitory injunction, and issuing a writ of execution despite the Supreme Court's TRO and the pending validity of the CJVA.
• Grave Abuse of Authority: Whether Judge Villarosa's acts in rendering the TRO nugatory and issuing the writ of execution constitute grave abuse of authority.
• Gross Misconduct and Violation of the New Code: Whether Judge Villarosa's acts constitute gross misconduct and a violation of the New Code of Judicial Conduct.
• Penalty: Whether, given his supervening retirement, Judge Villarosa should be fined PHP 200,000.00 with forfeiture of retirement benefits except accrued leave credits and disqualification from public office in lieu of dismissal.

• Gross Ignorance of the Law: Yes. Judge Villarosa demonstrated gross ignorance when he peremptorily resolved the case on the merits and issued a permanent injunction despite the Supreme Court's TRO, rendering it nugatory; Rule 140, Section 14(j) classifies this as a serious charge.
• Grave Abuse of Authority: Yes. His circumvention, if not total negation, of the Supreme Court's TRO constitutes grave abuse of authority under Rule 140, Section 14(l).
• Gross Misconduct and Violation of the New Code: Yes. His stubborn disregard of well-known rules and weaponization of court processes violated New Code Canon 2, Section 1 and constituted gross misconduct under Rule 140, Section 14(a).
• Penalty: Fine of PHP 200,000.00, forfeiture of retirement benefits except accrued leave credits, and disqualification from reinstatement or appointment to public office, in lieu of dismissal due to supervening retirement under Rule 140, Sections 17 and 18.

• Gross Ignorance of the Law: The Court adopted and approved the JIB Report dated October 17, 2023 insofar as it found Judge Villarosa liable for gross ignorance of the law. Canon 6 of the New Code of Judicial Conduct requires judges to maintain competence and diligence, and Section 3 thereof ordains judges to take reasonable steps to maintain and enhance their knowledge, skills, and personal qualities. Under Department of Justice vs. Mislang, where the law is straightforward and the facts so evident, failure to know it or to act as if one does not know it constitutes gross ignorance of the law. A judge is presumed to have acted with regularity and good faith, but a blatant disregard of clear and unmistakable provisions of law and Supreme Court circulars upends this presumption. For liability to attach, the assailed order must not only be erroneous; it must also be established that the judge was moved by bad faith, dishonesty, hatred, or some other like motive. Monticalbo vs. Judge Maraya and Philippine National Construction Corp. vs. Mupas reinforce that not every error or mistake renders a judge liable, but a patent disregard of simple, elementary, and well-known rules constitutes gross ignorance. Here, instead of complying with the Supreme Court's TRO in the consolidated cases entitled Philippine Charity Sweepstakes Office vs. TMA Group of Companies Pty Ltd., Judge Villarosa peremptorily resolved Civil Case No. 11-310 on the merits and issued a permanent mandatory and prohibitory injunction, rendering the TRO nugatory and pre-empting the Supreme Court from resolving the validity of the CJVA. This was a blatant disregard of basic rules, not a mere error of judgment.

• Grave Abuse of Authority: Under Pilipinas Shell Petroleum Corp. vs. Omelio, grave abuse of authority is defined as a misdemeanor committed by a public officer who, under color of office, wrongfully inflicts upon any person bodily harm, imprisonment, or other injury; it is an act of cruelty, severity, or excessive use of authority. Grave abuse of authority can be shown when the inefficiency springs from a failure to recognize a basic and fundamental rule, law, or principle. Villaflor vs. Amatong held that a lower court judge's brazen disregard of a TRO issued by an appellate court constitutes grave abuse of authority, and that inferior courts must be modest enough to defer to the orders of higher courts. Golangco vs. Villanueva likewise held that disregard by a judge of the Supreme Court's pronouncement on TROs amounts not only to ignorance of the rule but also to grave abuse of authority, misconduct, and conduct prejudicial to the proper administration of justice. Judge Villarosa circumvented, if not totally negated, the Supreme Court's TRO by resolving the merits and issuing injunctive and execution orders. Thus, he is liable for grave abuse of authority.

• Gross Misconduct and Violation of the New Code: Tobias vs. Limsiaco, Jr. defines misconduct as a transgression of some established and definite rule of action, willful in character, improper or wrong behavior; "gross" means out of all measure, beyond allowance, flagrant, shameful, and such conduct as is not to be excused. Gacad vs. Clapis, Jr. holds that gross misconduct exists if the judicial act complained of is inspired by corrupt motive or a persistent disregard of well-known rules, implying wrongful intention and not a mere error of judgment. Here, the totality of circumstances showed Judge Villarosa's stubborn disregard of the rules, casting doubt on his impartiality, integrity, and propriety. He allowed his court to be weaponized through an abuse of court processes, violating Canon 2, Section 1 of the New Code of Judicial Conduct, which requires judges to ensure that not only is their conduct above reproach but that it is perceived to be so in the view of a reasonable observer. The Court also noted his prior administrative cases and pending cases as evidence of a persistent disregard of well-known rules.

• Penalty: Rule 140, Section 14 classifies gross misconduct constituting violations of the Code of Judicial Conduct, gross ignorance of the law or procedure, and grave abuse of authority as serious charges. Section 17 provides that if the respondent is guilty of a serious charge, the sanctions include dismissal from service, suspension from office, or a fine of more than PHP 100,000.00 but not exceeding PHP 200,000.00. Section 18(b) provides the penalty in lieu of dismissal on account of supervening resignation, retirement, or other modes of separation of service, namely forfeiture of benefits and/or fine. Judge Villarosa retired on August 12, 2018, so dismissal from the service could no longer be implemented. In Office of the Court Administrator vs. Judge Villarosa, he had been found guilty of four counts of gross ignorance of the law and fined a total of PHP 140,000.00, but dismissal was not implemented due to his supervening retirement. In the present case, the Court imposed a fine of PHP 200,000.00, forfeiture of retirement benefits except accrued leave credits, and disqualification from reinstatement or appointment to any public office, including government-owned or controlled corporations.

• Gross ignorance of the law — A judge is presumed to have acted with regularity and good faith, but a blatant disregard of clear and unmistakable provisions of law and Supreme Court circulars upends this presumption. Liability requires not only an erroneous order but also that the judge was moved by bad faith, dishonesty, hatred, or some other like motive. Where the law is straightforward and the facts so evident, failure to know it or to act as if one does not know it constitutes gross ignorance of the law. The Court applied this doctrine because Judge Villarosa resolved the case on the merits and issued a permanent injunction despite the Supreme Court's TRO, rendering the TRO nugatory.

• Grave abuse of authority — Grave abuse of authority is a misdemeanor committed by a public officer who, under color of office, wrongfully inflicts upon any person bodily harm, imprisonment, or other injury; it is an act of cruelty, severity, or excessive use of authority. A lower court judge's brazen disregard of a TRO issued by an appellate or higher court constitutes grave abuse of authority. Inferior courts must defer to the orders of higher courts; otherwise, the appellate jurisdiction of the higher court would be rendered meaningless. The Court applied this doctrine because Judge Villarosa circumvented, if not totally negated, the Supreme Court's TRO.

• Gross misconduct — Misconduct means a transgression of some established and definite rule of action, willful in character, improper or wrong behavior. "Gross" means out of all measure, beyond allowance, flagrant, shameful, and such conduct as is not to be excused. For gross misconduct to exist, the judicial act complained of should be corrupt or inspired by the intention to violate the law, or a persistent disregard of well-known rules. The Court applied this doctrine because Judge Villarosa showed a stubborn disregard of the rules and allowed his court to be weaponized through an abuse of court processes.

• Respect for temporary restraining orders and hierarchy of courts — A lower court judge does not have the privilege of overturning the rules or TROs of higher courts. Disregard of the Supreme Court's pronouncement on TROs renders the Court inutile, leads to a diminution of its power as the final arbiter of legal issues, and results in judicial instability and chaos. Inferior courts must be modest enough to consciously realize the position they occupy in the integrated judicial system. The Court applied this doctrine because Judge Villarosa pre-empted the Supreme Court from resolving the core issue of the CJVA's validity.

• Penalty in lieu of dismissal on supervening retirement — Under Rule 140, Sections 17 and 18, if the respondent is guilty of a serious charge but dismissal can no longer be implemented because of supervening resignation, retirement, or other modes of separation of service, the Court may impose forfeiture of all or part of the benefits and/or a fine of more than PHP 100,000.00 but not exceeding PHP 200,000.00. The Court applied this doctrine because Judge Villarosa had retired on August 12, 2018, and imposed a PHP 200,000.00 fine, forfeiture of retirement benefits except accrued leave credits, and disqualification from public office.

• "Where the law is straightforward and the facts so evident, failure to know it or to act as if one does not know it constitutes gross ignorance of the law." — This passage states the controlling standard for gross ignorance of the law, which the Court applied to Judge Villarosa's disregard of the Supreme Court's TRO.

• "Here, instead of complying with the Court's Temporary Restraining Order in the consolidated cases entitled Philippine Charity Sweepstakes Office v. TMA Group of Companies Pty Ltd., Judge Villarosa demonstrated his gross ignorance of the law when he even peremptorily resolved the case on the merits, with an accompanying writ of permanent mandatory and prohibitory injunction borne therein." — This is the ratio decidendi on gross ignorance: the judge's act of resolving the merits and issuing a permanent injunction despite the TRO rendered the TRO nugatory.

• "The disregard then by respondent Judge of this Court's pronouncement on temporary restraining orders was not just one of ignorance of the rule but one amounting, in a larger sense, to grave abuse of authority, misconduct, and conduct prejudicial to the proper administration of justice." — This passage, quoted from Golangco vs. Villanueva, defines the legal character of a judge's disregard of a Supreme Court TRO and supports the finding of grave abuse of authority and gross misconduct.

• "Verily, in lieu of dismissal from the service, Judge Villarosa should be fined PHP 200,000.00 with forfeiture of his retirement benefits, except accrued leave credits, if any, with disqualification from reinstatement or appointment to any public office, including government-owned or controlled corporations." — This passage states the penalty imposed in lieu of dismissal on account of Judge Villarosa's supervening retirement.

• Department of Justice vs. Mislang, 791 Phil. 219 (2016) — The Court cited this as the controlling standard for gross ignorance of the law, holding that where the law is straightforward and the facts evident, failure to know it or act as if one does not know it constitutes gross ignorance; it also states that liability requires bad faith, dishonesty, hatred, or like motive.
• Monticalbo vs. Judge Maraya, 664 Phil. 1 (2011) — Cited to emphasize that not every error or mistake renders a judge liable and that good faith and absence of malice, corrupt motives, or improper considerations are defenses to a charge of ignorance of the law.
• Philippine National Construction Corp. vs. Mupas, 889 Phil. 641 (2020) — Cited for the rule that when the law is sufficiently basic, a judge owes it to the office to know and apply it; patent disregard of simple, elementary, and well-known rules constitutes gross ignorance.
• Golangco vs. Villanueva, 343 Phil. 937 (1997) — Cited for the rule that a judge's disregard of the Supreme Court's pronouncement on TROs amounts not only to ignorance of the rule but also to grave abuse of authority, misconduct, and conduct prejudicial to the proper administration of justice.
• Tobias vs. Limsiaco, Jr., 655 Phil. 1 (2011) — Cited for the definition of gross misconduct as a transgression of an established and definite rule of action, willful in character, and "gross" as out of all measure, flagrant, shameful, and not excusable.
• Gacad vs. Clapis, Jr., 691 Phil. 126 (2012) — Cited for the rule that gross misconduct exists if the judicial act complained of is inspired by corrupt motive or a persistent disregard of well-known rules, implying wrongful intention and not a mere error of judgment.
• Office of the Court Administrator vs. Dumayas, 827 Phil. 173 (2018) — Cited to show that a significant number of administrative cases on the same grounds is evidence of a judge's stubborn propensity not to follow the rule of law and procedure, indicating gross misconduct.
• Pilipinas Shell Petroleum Corp. vs. Omelio, A.M. RTJ-23-031, March 28, 2023 — Cited for the definition of grave abuse of authority as a misdemeanor committed by a public officer who, under color of office, wrongfully inflicts injury, or an act of cruelty, severity, or excessive use of authority.
• Villaflor vs. Amatong, 398 Phil. 503 (2000) — Cited for the rule that a lower court judge's brazen disregard of a TRO issued by an appellate court constitutes grave abuse of authority and that inferior courts must defer to higher courts.
• Sps. Arcilla vs. Palaypayon, 416 Phil. 875 (2001) — Cited for the rule that a judge's disregard of rules and basic due process, in violation of rights he is duty bound to defend, is considered grave abuse of authority.
• Office of the Court Administrator vs. Judge Villarosa, 869 Phil. 600 (2020) — Cited as Judge Villarosa's prior administrative record, where he was found guilty of four counts of gross ignorance of the law and fined PHP 140,000.00, with forfeiture of retirement benefits and disqualification because dismissal could no longer be implemented due to retirement.
• PCSO vs. TMA Group of Companies Pty Ltd., 860 Phil. 522 (2019) — Cited as the underlying Supreme Court decision that invalidated the orders of Judge Villarosa and ordered TMA et al. to return PHP 707,223,555.44.

• Rule 140, Section 14, Rules of Court (as amended by A.M. No. 21-08-09-SC, February 22, 2022) — Classifies gross misconduct constituting violations of the Code of Judicial Conduct, gross ignorance of the law or procedure, and grave abuse of authority as serious charges. The Court applied these classifications to Judge Villarosa.
• Rule 140, Section 17, Rules of Court — Provides that for a serious charge, the sanctions include dismissal from service, suspension, or a fine of more than PHP 100,000.00 but not exceeding PHP 200,000.00. This authorized the PHP 200,000.00 fine.
• Rule 140, Section 18(b), Rules of Court — Provides the penalty in lieu of dismissal on account of supervening resignation, retirement, or other modes of separation of service, namely forfeiture of benefits and/or fine. The Court applied this because Judge Villarosa had retired.
• New Code of Judicial Conduct, Canon 6, Sections 1 and 3 (A.M. No. 03-05-01-SC) — Requires judges to maintain competence and diligence and to take reasonable steps to maintain and enhance their knowledge, skills, and personal qualities. The Court cited this in finding gross ignorance of the law.
• New Code of Judicial Conduct, Canon 2, Section 1 — Requires judges to ensure that their conduct is above reproach and perceived to be so in the view of a reasonable observer. The Court cited this in finding gross misconduct.

Gesmundo, C.J., Leonen, SAJ., Caguioa, Hernando, Lazaro-Javier, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, J. Lopez, Dimaampao, and Kho, Jr., JJ., concur. Marquez and Singh, JJ., no part.